You learn something new everyday. Sometimes things that you don't want to learn. I never knew this change was even on the books. Thanks, Calmloki for the reference. From FMF an overview (if you disregard some of the Soapbox stuff).
Free Money Finance: Owners of Second Homes: Beware of New Tax Laws
Owners of Second Homes: Beware of New Tax Laws
>>>The new law eliminates the capital gains exclusion, prorated on the amount of time a home was not your primary residence. After January 1, every day you aren't living in a home starts adding to the percentage of capital gains tax you will ultimately be obliged to pay.
If I were planning to buy a second home to retire to, and they changed the laws like this and gave only 6 months to sell the first house to avoid the cap gains, boy I would be ticked. I agree that this change can only hurt the housing market.