I can understand capital gains tax for someone who has owned their house for less than 2 years -- this is to go after people who really always intended to sell but just lived in the house for a short time to avoid paying capital gains.  However, I cannot for the life of me understand the logic of imposing a capital gains tax on someone who has lived in their house for over 12 years as he suggests.  That is a disincentive to sell!  Especially at these low interest rates, if you are a retiree and need the money it would make more sense to get a reverse mortgage or line of credit than to sell and pay capital gains tax.