What happened to the luxury market in 2017?

Luxury homes stayed on the market for an average of 116 days -- nearly double the time for lower-priced homes BYMARIAN MCPHERSON Staff Writer JAN 4 Although inventory at the luxury level has remained robust in the midst of a shortage at the mid- and lower- priced tiers, realtor.com says that didn’t translate into extra sales during 2017. In fact, the average luxury property stayed on the market for 116 days — a 5.3 percent year-over-year increase from 2016. Furthermore, the national luxury entry point increased 5.1 percent year-over-year to $804,000, while the national median sales price grew 1.8 percentage points more to 6.9 percent. Realtor.com director of economic research Javier Vivas says despite these stats, 2017 was a great year for buyers shopping at the higher end of the market. “Although 2017 was another strong year for the luxury housing market, it was outperformed by the U.S. market overall,” said Vivas in an emailed statement. “Age of inventory in the top 5 percent of the market slowed significantly over last year — a telltale sign that the luxury sector as a whole has weakened. Much of this slowing can be attributed to a wider selection of luxury homes for buyers and increased uncertainty over the last 12 months.” At the local level, luxury markets in California, Colorado, Hawaii and New York have fared exceptionally well over the past year with double-digit price gains. Maui (32.73 percent); Eagle, Colorado (31.49 percent); Kings, New York (30.33 percent); Kauai (25.11 percent); Hawaii (24.84 percent) and Honolulu (21.79 percent) counties all experienced home price growth above 20 percentage points, resulting in average home prices ranging from $1,753,158 to $2,485,125. Brooklyn; Seattle; and Marin, California in the Bay Area also posted 12 percent to 30 percent growth year-over-year, landing them in the top 10 fastest growing primary-home luxury markets in country, thanks to new development sales and increased demand from Chinese buyers. When it comes to the highest sales prices, New York tops the list with a median sales price of $5,284,197 — a whopping $1,913,509 more than the second most expensive market, San Mateo, California. California dominated the list, snagging half of the top 10 spots thanks to multi-million dollar asking prices in Marin ($3.28 million), San Francisco ($3.21 million), Santa Clara ($2.58 million) and Santa Barbara ($2.47 million). Looking forward to 2018, realtor.com says owners of these lavish properties need to keep an eye on the Tax Cuts and Jobs Act, which caps mortgage interest deductions at $750,000 and doesn’t allow homeowners to deduct the interest paid on vacation homes. Furthermore, buyers in high-tax states such as New York and California will also have to grapple with choosing between property taxes and state and local taxes, says realtor.com, since SALT (state and local tax) deductions have been limited to $10,000.

Strong jobs report offers glimmer of hope for inventory relief

Residential construction adds 30,000 jobs in December BYMARIAN MCPHERSON Staff Writer JAN 5 Although the inventory shortage has continued to rage on, the Employment Situation Summary for December 2017 from the U.S Bureau of Labor Statistics (BLS) shows there could be some relief on the way. The report shows that total nonfarm payroll employment rose by 148,000 jobs last month and that the market experienced continued robust growth in manufacturing, healthcare and construction. Source: U.S. Bureau of Labor Statistics The unemployment rate is at 4.1 percent, and the number of unemployed persons at 6.6 million, which is unchanged from October’s and November’s report. The real estate and housing industry is especially focused on the construction sector, which has steadily grown since Hurricanes Harvey, Maria and Irma in August, added 30,000 jobs in December and increased by 210,000 in 2017. Although some economists are hopeful about the steady growth, others aren’t sure that it’s enough to reach the 50-year average of 1.5 million residential construction starts. Realtor.com chief economist Dr. Joesph Kirchner said, “November’s increase in construction labor is a hopeful reminder that things will eventually get better for our severely depleted housing market. In fact, if this trend gains momentum, it could address one of the largest issues holding back inventory — a lack of construction labor. ”Let’s hope it does, because the report also shows no end in sight for the insatiable demand we’re seeing in the market,” he added. “Jobs drive housing demand and with the unemployment rate remaining at its lowest level of the millennium, it’s only going to pick up.” National Association of Realtors chief economist Lawrence Yun was underwhelmed by the report, saying that much more explosive growth is needed to make a change. “With the unemployment rate in the construction industry having fallen from over 20% in 2010 to 5.9% at the year-end of 2017, there could be a little growth to home construction despite the on-going housing shortage,” said Yun in an emailed statement. “There needs to be serious consideration in allowing temporary work visas until American trade schools can adequately crank out much needed, domestic skilled construction workers.” Chief economist at Fannie Mae Doug Duncan also weighed in, saying, “The lack of wage acceleration should support gradual monetary policy normalization. However, we anticipate a pickup in wage growth this year, which could lead to a rise in the working-age labor force participation rate. “And if the tax bill can incite stronger growth in capital expenditures and productivity, keeping labor costs contained, the Fed could still afford to be patient with its tightening. “One bright spot we saw in the report is the biggest monthly rise in residential construction employment in 2017, raising hopes for some supply relief for housing this year.”

Number of US renters declines for first time in 13 years

May be an anomaly as aging baby boomers and millennials are expected to drive new growth in the market BYJOTHAM SEDERSTROM Staff Writer JAN 5 The nation’s population of renters, a third of American households, decreased modestly for the first time in 13 years as declining foreclosure rates and steadily rising rent helped reduce the number to 43 million in the first half of 2017, down by about 500,000, according to a report by apartment listing service Abodo. The decline, ushered in by first-time homebuyers and historically low mortgage rates, comes as the national median rent for a one-bedroom apartment increased by 2.4 percent in 2017, to $1,040, according to an Adobo. Two-bedroom apartments, similarly, increased by 3 percent, to $1,252, according to the report. Overall, rent spiked in 28 states, with New Orleans, Reno, Honolulu and Seattle all experiencing increases of more than 2 percent, and New Orleans, in particular, seeing a 4-percent bump. “Two-bedroom rents exhibited similar stability through the first quarter before more sharp increases in the second,” according to the authors of the Abodo report, released on Wednesday. “After a pause in the late summer and early autumn, two-bedroom rents, like one-bedroom rents, saw their greatest hikes in the last three months of the year.” Foreclosure rates, meanwhile, hit an 11-year low in the third quarter of 2017, an indication that fewer homeowners were moving — reluctantly, perhaps — to rental units upon losing property. Despite rising rental rates, the decline in renters in 2017 may be an anomaly, according to a separate report issued Tuesday by the Joint Center for Housing Studies of Harvard University. Rental households are projected to grow by 13.6 million between 2015 and 2025 as aging baby boomers and millennials drive new growth in the market, according to the Harvard study. “Over the next 10 years, the younger half of the millennial generation — the largest generation in U.S. history — will move into their 20s and 30s, the age groups most likely to rent,” wrote the authors of the study. “In addition, minority households are expected to account for nearly three-quarters of household growth in 2015–2025 and fully 90 percent in 2025–2035.”

Realtors, homebuyers are confident in today’s real estate market

Realtors in 37 states expect buyer traffic to be "strong" in 2018 BYMARIAN MCPHERSON Staff Writer JAN 5 Association of Realtors (NAR) today released the results of the Realtors Confidence Index (see report below), which measures NAR members’ expectations for the housing market over the next six months on a scale of 1-100. Source: National Association of Realtors According to the results, Realtors are confident about what the first half of 2018 will bring, especially when it comes to the sales pace for detached, single-family homes. Respondents in 36 states expect the sales pace to be “strong” (60+ points), while respondents in four states (Oklahoma, Illinois, West Virginia and Connecticut) only expect the market to be “stable.” The only state to receive a “weak” (50 points or less) rating was Alaska. Meanwhile, realtors in Washington, Nevada, Nebraska, Wisconsin, Kentucky, Tennessee, South Carolina, Delaware and Rhode Island expect their market to be “very strong” (75+ points) in 2018. When it comes to the sales pace for townhomes and condominiums, the outlook remains relatively robust with respondents in 41 states also expecting the 12-month outlook to be “stable” to “very strong” for townhomes, and respondents in 16 states expecting the 12-month outlook to be “strong” for condos. Will it be a buyer’s or seller’s market? Thanks to continued inventory issues, economists and real estate experts alike are predicting that 2018 will be a seller’s market, giving homeowners pricing leverage in a landscape with weak residential housing starts. Sixty-nine percent of respondents expect home prices to grow over the upcoming year, with the highest home price growth in the West and Southeast. Realtors in Florida, Maryland, Colorado, Nevada, Arizona and Washington expect home prices to skyrocket anywhere from 4 percent to 6 percent. Meanwhile, survey takers in Alaska, North and South Dakota, Oklahoma, Iowa, Illinois, Missouri, Louisiana, Mississippi, Vermont and Connecticut expect home prices to remain essentially unchanged with 0 percent to 2 percent growth. Furthermore, respondents said homes have been selling, on average, within 40 days and at a 31-percent premium. Despite these factors, Realtors expect buyer demand to remain robust over the next twelve months, echoing studies about millennials finally entering the homebuying market and buyers of all ages taking advantage of jobs and wage growth. The buyer traffic index is at 62, meaning that most Realtors expect buyers to continue vying for their dream homes. Respondents in 37 states expect buyer traffic to remain “strong,” and another seven states are expected to be “stable.” Buyer traffic in the Dakotas, Alaska, Louisiana and West Virginia is predicted to be “very weak” or “weak.” Delaware is expecting to have a knockout year. Realtors are still wary about the effects of low inventory and the tax reform bill, which includes changes to the mortgage interest deduction, state and local tax (SALT) deductions and capital gains taxes.

Landlords starting to accept digital currency for rent

On both coasts, companies are beginning to accept bitcoin, ethereum, and other popular digital cryptocurrencies to appeal to younger renters BYGILL SOUTH Staff Writer JAN 4 Forget cutting checks to pay for rent. On both coasts, several tech-forward real estate companies have begun accepting digital currency for rental deposits and payments, coinciding with the growing general interest in, and value of, these new electronic payment systems. On the West Coast, Hubilu Venture Corporation, a real estate asset management company which buys student housing and investment property around the University of Southern California (USC) campus, announced today it will accept rental payments in bitcoin, ethereum, bitcoin cash and litecoin–all popular digital currencies. Hubilu said it would use the Coinbase digital currency exchange for processing the cryptocurrency in their “respective blockchains.” Blockchains are the computer-based ledgers that record who owns how much of a given cyptocurrency, and keep a running tally of transactions made with each currency. Hubilu CEO, David Behrend, said in a press statement that, “we know the importance of digital payment systems and believe in the long term adoption of cryptocurrency.” Meanwhile across the country in Brooklyn, New York, tech-savvy brokerage Brookliv has begun accepting bitcoin for rental deposits, according to science and tech publication Inverse. The company reportedly has been accepting digital currency rental payments from three tenants already. Brookliv broker Ari Weber told Inverse that his company made the decision to accept payment via digital currency to appeal to his young rental base and as a way to stand out in a crowded market. Inverse also flagged that online rental payment platform, ManageGo is accepting bitcoin and other cryptocurrency for rent payments, although it is taking on the responsibility of converting the cryptocurrency into US dollars before putting it into property manager client accounts. Will other brokerages, landlords, and property holding companies follow suit in accepting digital currency for rent? That remains to be seen, but it’s probably a safer bet than buying into the currencies themselves.

Realtors, homebuyers are confident in today’s real estate market

Realtors in 37 states expect buyer traffic to be "strong" in 2018 BYMARIAN MCPHERSON Staff Writer JAN 5 The National Association of Realtors (NAR) today released the results of the Realtors Confidence Index (see report below), which measures NAR members’ expectations for the housing market over the next six months on a scale of 1-100. Source: National Association of Realtors According to the results, Realtors are confident about what the first half of 2018 will bring, especially when it comes to the sales pace for detached, single-family homes. Respondents in 36 states expect the sales pace to be “strong” (60+ points), while respondents in four states (Oklahoma, Illinois, West Virginia and Connecticut) only expect the market to be “stable.” The only state to receive a “weak” (50 points or less) rating was Alaska. Meanwhile, realtors in Washington, Nevada, Nebraska, Wisconsin, Kentucky, Tennessee, South Carolina, Delaware and Rhode Island expect their market to be “very strong” (75+ points) in 2018. When it comes to the sales pace for townhomes and condominiums, the outlook remains relatively robust with respondents in 41 states also expecting the 12-month outlook to be “stable” to “very strong” for townhomes, and respondents in 16 states expecting the 12-month outlook to be “strong” for condos. Will it be a buyer’s or seller’s market? Thanks to continued inventory issues, economists and real estate experts alike are predicting that 2018 will be a seller’s market, giving homeowners pricing leverage in a landscape with weak residential housing starts. Sixty-nine percent of respondents expect home prices to grow over the upcoming year, with the highest home price growth in the West and Southeast. Realtors in Florida, Maryland, Colorado, Nevada, Arizona and Washington expect home prices to skyrocket anywhere from 4 percent to 6 percent. Meanwhile, survey takers in Alaska, North and South Dakota, Oklahoma, Iowa, Illinois, Missouri, Louisiana, Mississippi, Vermont and Connecticut expect home prices to remain essentially unchanged with 0 percent to 2 percent growth. Furthermore, respondents said homes have been selling, on average, within 40 days and at a 31-percent premium. Despite these factors, Realtors expect buyer demand to remain robust over the next twelve months, echoing studies about millennials finally entering the homebuying market and buyers of all ages taking advantage of jobs and wage growth. The buyer traffic index is at 62, meaning that most Realtors expect buyers to continue vying for their dream homes. Respondents in 37 states expect buyer traffic to remain “strong,” and another seven states are expected to be “stable.” Buyer traffic in the Dakotas, Alaska, Louisiana and West Virginia is predicted to be “very weak” or “weak.” Delaware is expecting to have a knockout year. Realtors are still wary about the effects of low inventory and the tax reform bill, which includes changes to the mortgage interest deduction, state and local tax (SALT) deductions and capital gains taxes. About the survey The RCI Survey gathers information from Realtors about local market conditions based on their client interactions and the characteristics of their most recent sales for the month. The November 2017 survey was sent to 50,000 Realtors who were selected from NAR’s nearly 1.2 million members through simple random sampling and to 5,665 respondents in the previous three surveys who provided their email addresses. Email Marian McPherson.

Does the American Dream no longer include homeownership?

While it has no official definition, the American Dream has always been the notion that citizens of the United States can better their lot in life through hard work. That encompasses the idea that hard-working kids of hard-working parents would have a better life than the previous generation, and homeownership has generally been considered part of that. A decade after the housing market crashed, the homeownership part of the American Dream has become more elusive, according to a new study from Pew Research Center. The report, which analyzed Census Bureau housing data, showed that more United States households "are headed by renters than at any point since at least 1965." Between 2006 and 2016, the U.S. added 7.6 million households, but "in part because of the lingering effects of the housing crisis," according to Pew. During that 10-year period, the number of households renting their homes jumped from 34.6 million (31.2% of the total) to 43.3 million (36.6%). That tops the relatively recent high watermark of 36.2% renting in 1986 and 1988, while coming in just below 1965's 37% renters rate. Young adults lead the way While young adults have historically been more likely to rent than other age groups, the numbers are increasing. More than 6 in 10 (65%) of households headed by someone under 35 rent, Pew reported. That's up from 57% in 2006 but it's not as big a gain as the 35-44 age group made where the percentage of renters jumped from 31% in 2006 to 41% in 2016. The numbers rose among Americans 45-64 as well, going from 22% in 2006 to 28% in 2016. In fact the only demographic studied that did not post an increase was those 65 or older who stayed flat at 20%. It's not that people don't want to buy In many cases the increase in renters has been blamed at least partially on Millennials not wanting to be tied down or not working hard enough to afford buying. In fact most renters want to buy, according to a separate Pew report: "In a 2016 Pew Research Center survey, 72% of renters said they would like to buy a house at some point. About two-thirds of renters in the same survey (65%) said they currently rent as a result of circumstances, compared with 32% who said they rent as a matter of choice. When asked about the specific reasons why they rent, a majority of renters, especially nonwhites, cited financial reasons." While mortgages are cheap on a historical basis, inventories remain low, prices have soared, and mortgage standards have remained tough. Banks and other lenders may have more flexibility than they did right after the housing crisis, but the days of stated income, low-doc, or even no doc loans are largely gone. Add in the fact that some capable, qualified buyers have decided to put off homeownership due to lingering fears over the economy and you can see why homeownership has declined. Americans still want to buy houses. Some of us can't afford to right now, while others are waiting for better opportunities. Many simply lack the means to reasonably expect ever to be able to make a purchase. Owning a home remains part of the American dream, at least for most Americans, but it's also a less attainable goal than it was for previous generations.

How Many Credit Checks Before Closing on a Home?

BY TALI WEE ON 29 DEC 2017 Throughout the approval process, push yourself to maintain your credit while lenders pull it. Navigating the purchase of a home can be overwhelming for first-time buyers. Lenders require documentation of seemingly every detail of your life before granting a loan. And of course, they will require a credit check. A question many buyers have is whether a lender pulls your credit more than once during the purchase process. The answer is yes. Lenders pull borrowers’ credit in the beginning of the approval process, and then again just prior to closing. Initial credit check for pre-approval In the first phase of acquiring a loan, pre-qualification, you’ll self-report financial information. Lenders want to know details such as your credit score, social security number, marital status, history of your residence, employment and income, account balances, debt payments and balances, confirmation of any foreclosures or bankruptcies in the last seven years and sourcing of a down payment. This is only a portion of the total information needed for your mortgage application. Once you’re ready to get pre-approved for a loan, lenders will verify your financial information. During this phase, lenders require documentation to confirm the information in your application and pull your credit history for the first time. You may be required to submit a letter of explanation for each credit inquiry in recent years, such as opening a new credit card, and for any derogatory information in your history, like a missed payment. Once you find a home within budget and make an offer, additional or updated documentation may be required. Underwriters then analyze the risk of offering you a loan based on the information in your application, credit history and the property’s value. Second credit check at closing It can take time for your offer to be accepted, and for your loan to pass underwriting. During this period from the initial credit check to closing, new credit incidents may occur on your history. Many lenders pull borrowers’ credit a second time just prior to closing to verify your credit score remains the same, and therefore the risk to the lender hasn’t changed. If you were late on a payment and were sent to collections, it can affect your loan. Or, if you acquired any new loans or lines of credit and used those credit lines, your debt-to-income ratio would change, which can also affect your loan eligibility. If the second credit check results match the first, closing should occur on schedule. If the new report is lower or concerning to the lender, you could lose the loan. Alternatively, the lender may send your application back through underwriting for a second review. It’s important for buyers to be aware that most lenders run a final credit check before closing, so the home-buying window is a time to prudently mind your credit.

What You Need To Know About New Tax Law

(CNN Money) — It’s official. Congress has ushered through the first major tax overhaul since Ronald Reagan was president. The measure, which President Trump signed into law on Friday, is about to shake up life for millions of Americans. It will redistribute the country’s wealth. It could sway decisions about whether to buy a home, or where to send kids to school. It could even affect when unhappy couples decide to get a divorce. As the bill becomes law, here are 34 things you need to know. 1. This is the first significant reform of the U.S. tax code since 1986. Reagan signed major legislation for corporations and individuals in 1986. Since then, serious tax reform has eluded Republicans, though they repeatedly called for it as the tax code became longer and more arcane. 2. Changes have been made to both individual and corporate tax rates. Individual provisions in the new legislation technically expire by the end of 2025, though some people expect that a future Congress won’t actually let them lapse. Most of the corporate provisions are permanent. 3. Tax reform will increase deficits by $1.46 trillion over the next decade. That’s the net number that’s been crunched by the nonpartisan Joint Committee on Taxation. The future law’s contribution to the debt will likely be even higher if individual tax cuts are re-upped in eight years. 4. There are still seven tax brackets for individuals, but the rates have changed. Americans will continue to be placed in one of seven tax brackets based on their income. But the rates for some of these brackets have been lowered. The new rates are: 10%, 12%, 22%, 24%, 32%, 35% and 37%. 5. The standard deduction has essentially been doubled. Republicans want fewer people to itemize their taxes. To achieve this, they’ve nearly doubled the standard deduction. For single filers, the standard deduction has increased from $6,350 to $12,000; for married couples filing jointly, it’s increased from $12,700 to $24,000. 6. The personal exemption is gone. Previously, you could claim a $4,050 personal exemption for yourself, your spouse and each of your dependents, which lowered your taxable income. No longer. For some families, the elimination of the personal exemption will reduce or negate the tax relief they get from other parts of the reform package. 7. The state and local tax deduction now has a cap. The state and local tax deduction, or SALT, remains in place for those who itemize their taxes — but now there’s a $10,000 cap. Previously, filers could deduct an unlimited amount for state and local property taxes, plus income or sales taxes. 8. The child tax credit has been expanded. The child tax credit has doubled to $2,000 for children under 17. It’s also now available, in full, to more people. The entire credit can be claimed by single parents who make up to $200,000, and married couples who make up to $400,000. 9. There’s a new tax credit for non-child dependents, like elderly parents. Taxpayers may now claim a $500 temporary credit for non-child dependents. This can apply to a number of people adults support, such as children over age 17, elderly parents or adult children with a disability. 10. Fewer people will have to deal with the alternative minimum tax. The alternative minimum tax, a parallel tax system that ensures people who receive a lot of tax breaks still pay some federal income taxes, remains in place for individuals. But fewer people will have to worry about calculating their tax liability under the AMT moving forward. The exemption has been raised to $70,300 for singles, and to $109,400 for married couples. 11. And the mortgage interest deduction has been lowered. Current homeowners are in the clear. But from now on, anyone buying a new home will only be able to deduct the first $750,000 of their mortgage debt. That’s down from $1 million. This is likely to affect people looking for homes in more expensive coastal regions. 12. None of this will affect your 2017 taxes. Americans won’t need to worry about these changes when they start filing their 2017 tax returns in about a month. The new laws will first be applied to 2018 taxes. 13. By the way, you can still deduct student loan interest. The deduction for student loan interest, which is up to $2,500 per year, is safe. 14. You can still deduct medical expenses. The deduction for medical expenses wasn’t cut. In fact, it’s been expanded for two years. In that time, filers can deduct medical expenses that add up to more than 7.5% of adjusted gross income. In the past, the threshold for most Americans was 10% of adjusted gross income. 15. If you’re a teacher, you can still deduct classroom supplies. The deduction for teachers who spend their own money on school supplies was left alone. Educators can continue to deduct up to $250 to offset what they spend on classroom materials. 16. The electric car tax credit lives on. Drivers of plug-in electric vehicles can still claim a credit of up to $7,500. Just as before, the full amount is good only on the first 200,000 electric cars sold by each automaker. GM, Nissan and Tesla are expected to reach that number some time next year. 17. Home sellers who turn a profit keep their tax break. Homeowners who sell their house for a gain will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains, so long as they’re selling their primary home and have lived there for two of the past five years. 18. 529 savings accounts can be used in new ways. In the past, funds invested in 529 savings accounts wasn’t taxed — but it could only be used for college expenses. Now, up to $10,000 can be distributed annually to cover the cost of sending a child to a “public, private or religious elementary or secondary school.” This change is a win for Education Secretary Betsy DeVos. 19. And tuition waivers for grad students remain tax-free. Graduate students still won’t have to pay income taxes on the tuition waiver they get from their schools. Such waivers are typically awarded to teaching and research assistants. 20. But say goodbye to the tax deduction for alimony payments. Alimony payments, which are codified in divorce agreements and go to the ex-spouse who earns less money, are no longer deductible for the person who writes the checks. This provision will apply to couples who sign divorce or separation paperwork after December 31, 2018. 21. The deduction for moving expenses is also gone … There may be some exceptions for members of the military. But most people will no longer be able to deduct the cost of their U-Haul when they move for work. 22. As is the tax preparation deduction … Before tax reform passed, people could deduct the cost of having their taxes prepared by a professional, or the money they spent on tax prep software. That break has been eliminated. 23. … The disaster deduction … Losses sustained due to a fire, storm, shipwreck or theft that aren’t covered by insurance used to be deductible, assuming they exceeded 10% of adjusted gross income. But now through 2025, people can only claim that deduction if they’ve been affected by an official national disaster. That would make someone whose house was destroyed by a California wildfire potentially eligible for some relief, while disqualifying the victim of a random house fire. 24. … And the reimbursement for bicycle commuters. The tax code used to let you to knock off up to $20 from your income per month for the costs of bicycle commuting to work, assuming you weren’t enrolled in a commuter benefit program. That’s gone. 25. Almost everyone is now exempt from the estate tax. Before tax reform, few estates were subject to the estate tax, which applies to the transfer of property after someone dies. Now, even fewer people have to deal with it. The amount of money exempt from the tax — previously set at $5.49 million for individuals, and at $10.98 million for married couples — has been doubled. 26. Adjustments for inflation will be slower. The new legislation uses “chained CPI” to measure inflation. It’s a slower measure than what was used before. Over time, that will raise more money for the federal government, but deductions, credits and exemptions will be worth less. 27. Oh, and the individual mandate on health insurance has been scrapped. Republicans failed to repeal Obamacare earlier this year, but they managed to get rid of one of the health law’s key provisions with tax reform. The elimination of the individual mandate, which penalizes people who do not have health care, goes into effect in 2019. The Congressional Budget Office has predicted that as a result, 13 million fewer people will have insurance coverage by 2027, and premiums will go up by about 10% most years. 28. You won’t be able to file your tax return on a postcard. Trump said H&R Block would go out of business after tax reform because filing taxes would become so simple. Not quite. While doubling the standard deduction will ease the process for some individuals, there’s still a web of deductions and credits to work through. And for small businesses, filing could become even more complicated. 29. The corporate tax rate is coming down. The corporate tax rate has been cut from 35% to 21% starting next year. The alternative minimum tax for corporations has been thrown out altogether. Earnings are expected to go up as a result. 30. Pass-through entities will also get a break. The tax burden by owners, partners and shareholders of S-corporations, LLCs and partnerships — who pay their share of the business’ taxes through their individual tax returns — has been lowered via a 20% deduction. The legislation includes a rule to ensure owners don’t game the system, but tax experts remain concerned about abuse of this provision. 31. Not all CEOs think they’ll use their savings to create jobs, though. Just 14% of CEOs surveyed by Yale University said their companies plan to make large, immediate capital investments in the United States following tax reform. Capital investments, like building plants and upgrading equipment, can spur hiring. 32. Plus, the way multinational corporations are taxed is about to change. The U.S. is switching to a territorial system of taxation, which means companies won’t owe federal taxes on income they make offshore. To help the transition, companies will be required to pay a one-time, low tax rate on their existing overseas profits — 15.5% on cash assets and 8% on non-cash assets, like equipment in which profits were invested. 33. By the way, there’s a provision to rein in executive pay at nonprofits. The legislation includes a new 21% excise tax on nonprofit employers for salaries they pay out above $1 million. That may mean some well-paid executives at nonprofits take a pay cut. 34. Businesses won’t be able to write off sexual harassment settlements. New Jersey Democratic Senator Bob Menendez’s amendment born of the #MeToo moment made it all the way through. Companies can no longer deduct any settlements, payouts or attorney’s fees related to sexual harassment if the payments are subject to non-disclosure agreements. — With contributions from Jeanne Sahadi, Kathryn Vasel, Tami Luhby, Anna Bahney, Jackie Wattles, Katie Lobosco, Lydia DePillis and Matt Egan. 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