As with many bills there are sections of the new Federal Housing Act which could have serious implications for many Long Island homeowners. Within this bills lies a short but important change to the previous law. Prior to 2009 if you sold your primary residence, and have lived in this residence for at least 2 of the last 5 years you may owe nothing to the government in the form of capital gains tax. This provision bolstered the american dream by allowing homeowners to access equity accumulated over time to by bigger and better homes. The new provisions of the bill effectively close a “loophole” which allowed investors to hold their investment properties, live in them for 2 to 5 years and then reap the benefits of the tax law which would allow them to not have to pay tax on up to $500,000 of capital gains. The new law states that you can only reap the benefits of the percentage of timeyou have lived in the property as your primary residence. For example; You own the investment property for 10 years, live in it for 2 of the 10 years, then sell for a total gain of $100,000. The new law whcih takes effect in 2009 will have you pay tax on 80% or $80,000 of gains. For more infirmation folow the links to the right to contact Paul Perrone directly from this page or go to PaulPerrone.com.