If I take cash out of my property I will owe income tax on it.
You can refinance your home or a rental and take cash out above and beyond the amount you owe now. Use it to repair your house, use it to invest in another property, or take a well-earned vacation. It’s all up to you.
The taxes due on a property are due when the sale happens. So if you do a 1031 Exchange (“Swap ‘til you Drop”) or pass the property on to your kids, you will not owe taxes and neither will they (subject to estate tax limits).