This information was brought to my attention by a real estate investor here in Arizona. Previously, 2nd homes and investment properties were exempt from capital gains tax if the owned could provide evidence that they lived in the home for 2 of the previous 5 years prior to selling the property. That is no longer available.
JMO:
I strongly recommend if you are thinking of selling your 2nd home or investment property that you meet with your tax advisor to discuss this change in the tax code as it may impact your asking price or even your decision to sell. With home prices down, the added tax expense may represent the difference between a profit and a loss. Also, with the capital gains reverting back to the previous levels beginning in 2011, your taxes could increase by up to 5%
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