The way I understand it is, if you lived in the home less than 5 years, your Cap Gains, ($500,000 exemption on a home, married filing jointly) would be prorated via a percentage as to the amount of time it was your actual residence vs. your transition.
I see this as really going after Boomer's and Retiree's that change houses every couple of years.
It's the socialist DemonRATS going after the middle class.
There's nothing that socialists hate more than the middle class of America. They want to tax them into oblivion.