Hannah HammondFounder & CEO, HB Capital & The Firm RE · CEO of HB Capital | Helping CRE Developers & Investors Fund Deals Nationwide | Host of The Hannah Hammond Show

Exactly how rich people get away with paying no taxes by investing in real estate!

Name: Exactly how rich people get away with paying no taxes by investing in real estate!
Uploaded: 2026-05-12T19:36:35+00:00
Duration: 45 s
Channel: Hannah Hammond
Description: In this video, Hannah Hammond explains how wealthy investors use real‑estate tax strategies to avoid paying capital‑gains tax. She illustrates the…

12 May 2026 · 1 min

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In this video, Hannah Hammond explains how wealthy investors use real‑estate tax strategies to avoid paying capital‑gains tax. She illustrates the process with a duplex bought for $300,000, renovated, and later valued at $1 million, generating a $700,000 gain. Instead of paying tax on that gain, investors employ a Section 1031 exchange: they sell the property and immediately purchase another property of equal or greater value, deferring the capital‑gains tax. The new property then produces additional passive income. Hammond links this tactic to her broader “buy, borrow, die” framework, which describes how the rich continuously acquire assets, finance them with debt, and ultimately pass them on tax‑free to heirs.

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Rich people don't pay taxes when they're investing in real estate, and here's exactly how they do it. So let's say you go buy a duplex for $300,000 and you renovate it, you hold it for some time, and it goes up to eventually be worth $1 million. Well, when you go to sell that asset, you're going to have $700,000 of gain that you're going to have to pay capital gains tax on, which nobody wants to do, especially rich people. So what they do is something called a 1031 exchange where they sell that property and they exchange it for another property, which all that means is they buy another property property of equal or greater value, and then they have no capital gains tax that's due, and that property generates more passive income. So that's the way that rich people are able to invest in real estate and not pay taxes. This goes back to my concept of buy, borrow, die.