At one point in the episode, one of the realtors says there's a difference between the American and the Brazilian market that changes the whole long-term math: how property tax works. The explanation that follows is, by far, one of the most valuable pieces of information on the show for anyone buying in California.

"Property tax here is based on your purchase price. And there's a cap on how much it can go up each year." — from the episode

How the math works

The reference is Proposition 13, passed in 1978. It establishes that:

• the property's taxable value is set by the purchase price;
• the base rate is 1% of that value — plus local fees and any voter-approved assessments, which push the final rate a bit higher;
• the taxable value can rise by no more than 2% per year, as long as there's no sale or new construction;
• when the property changes hands, it gets reassessed at the new price.

That's where the effect described on the episode comes from: someone who has lived in the same house for 30 years pays a tax bill that's "tiny" relative to what the house is worth today — while the neighbor who just bought the identical house next door pays based on the current price. Two identical houses, very different tax bills. That's why, in the California market, a property's tax isn't estimated from the neighborhood — it's estimated from the price you're going to pay.

What this means over the years

The reasoning laid out on the show is one of dilution: if market value tends to rise more than 2% a year over long periods, and the taxable value is capped at 2%, the tax burden relative to the property's worth shrinks over time. It's one of the reasons staying in a home for many years works out financially different here than in Brazil.

The honest counterpoint: in the year you buy, the bill is calculated on the full price — and for anyone entering the market now, that's the highest starting point in recent history.

Transferring the base at 55 or older

The episode mentions the possibility of carrying the old tax base over to a new home starting at age 55. The rule exists and was expanded by Proposition 19, from 2020: homeowners 55 or older, people with severe disabilities and disaster victims can transfer the taxable value of their current home to a replacement home, in any county in California, with up to three transfers over a lifetime, and specific deadlines and adjustments set by law when the new home costs more.

For anyone planning to downsize in retirement, this is one of the most relevant rules in the state — and it's worth checking with the county assessor's office, since the request involves a specific form, deadline and conditions.

Where this shows up in your bill

• Estimate the tax from the purchase price, never from what the current owner pays today.
• Add local fees on top of the 1% base — the effective rate usually ends up higher than that.
• Check for special neighborhood assessments, like Mello-Roos, which show up on the same bill.
• New construction reassesses the built portion: a major remodel or an ADU can change the taxable value.

Sources and verification

• California State Board of Equalization — Proposition 13: basis on purchase value, 1% base rate and 2% annual cap on taxable value.
• California State Board of Equalization and county assessors — Proposition 19 (2020): tax base transfer for homeowners 55 and older, people with severe disabilities and disaster victims, with up to three transfers.
• Los Angeles County Assessor and Orange County Assessor — reassessment upon change of ownership and new construction.
• Explanation of the effect over time and mention of the transfer at 55: realtors on the episode (April 2026).
• Transcript of episode 7 of the Cadê Moradia podcast.

Watch this part of the episode:

Prop 13 and property tax (approximate excerpt) — starting at 12:59 · CADÊ BRAZIL