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ELI5 'capital gains' to me??? And are they worth using in this situation?

We're Millenials in our 30s buying a house in another city in New Zealand. So please break this down to ABCs for me. We currently own a house + mortgage. Our goal is to buy a home. That's H-O-M-E. Not a flip, not a buy and chuck, not a money grub, not a building to crash in. Before this current one, I've never truly owned a house, and the next one will be the first time I've ever picked the building I want to live in myself, let alone put my name on one. So please use very basic toddler English.

Our original plan is to look for a house, come back sell+buy ect. Or rent for a while while we look while sitting on the money we have from selling. The end.

This is where the blither comes in: Since MIL is an ex realestate agent we're getting circular screaming phonecalls demanding we cancel OG plan in favor of keeping current house long after we buy the new one (or at least that's what I could put together from the mess scream yapped at me, and the info filtered through my partner who has a brain injury) After weeks of this I have yet to see a logical, rational step by step of her process as I am a millennial who knows jack shit about real estate/financing which is why I need you.

The plan has dithered between:

'Buy' new house, rent out old one for years after. I see this leaving us with no mass of money to pay new house with, just a piddle of rent to pay the whole thing off, plus mortgage.

or

'buy' new house first and rent that out for a few months until we sell and move (which makes more logic to me as I can actually see how we are paying the seller over just grabbing the house for free and crashing in it while we own 2 houses? But the way this was explained was an absolute mess and took me weeks to unpack. This is as far as I got).

There may have been other random plans here and there but I would have missed them in the mess due to burnout. Or these two could have just been one plan that was just blithered at me. As far as what TF we are going to purchase this new house with: The only thing being explained to me at this stage is 'capital gains'. Paying with debt, loans and mortgage I can get. But the only info I'm getting from partner and MIL about 'capital gains' is that: you buy a house with 'the difference between what you bought your old house for and what you're selling it for'???

So...buying a new house using a magical gap between numbers on our current house as currency while we rent one out??? And a seller would be happy to accept that??? Am I close?

Can I please get this torn/broken down to actual English that doesn't just look like I'm handing a pile of invisible unicorn farts to a seller and then crashing in their house for free????? At least loans, debts ect look closer to currency to me. Will this work in this situation without giving me a stroke from 4D chess?

English please, I'm getting burned out on boomer word salad.

submitted by /u/HelgaBlack
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source https://www.reddit.com/r/RealEstate/comments/pwd8l0/eli5_capital_gains_to_me_and_are_they_worth_using/
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