% Author: Simon-Pierre Boucher — contact@spboucher.ai
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% UQO Working Paper No. 10
% The Assessment Gap in Quebec: Vertical and Horizontal Inequity in
% Municipal Property Valuation
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\newcommand{\WPnumber}{10}
\newcommand{\WPtitle}{The Assessment Gap in Quebec}
\newcommand{\WPsubtitle}{Vertical and Horizontal Inequity in Municipal Property
  Valuation: Evidence from 522{,}769 Sales Matched to the Assessment Roll}
\newcommand{\WPdate}{October 2026}
\newcommand{\WPversion}{1.1}
\newcommand{\WPkeywords}{property tax, assessment ratio, vertical equity, regressivity, ratio study, measurement error, Quebec}
\newcommand{\WPjel}{H71, H22, R51, R31}

\newcommand{\WPauthor}{Simon-Pierre Boucher}
\newcommand{\WPaffiliation}{D\'epartement des sciences administratives\\
  Universit\'e du Qu\'ebec en Outaouais}
\newcommand{\WPemail}{simon-pierre.boucher@uqo.ca}
\newcommand{\WPaddress}{Gatineau -- Pavillon Alexandre-Tach\'e\\
  283, boulevard Alexandre-Tach\'e\\ Gatineau, Qu\'ebec, Canada J9A 1L8}

\newcommand{\WPabstract}{%
Municipal property taxes are levied on assessed values, so any systematic
relationship between assessment ratios and market value redistributes the
tax burden within a municipality. We match 522{,}769 residential sales
recorded in Quebec between 2021 and 2026 to the triennial assessment rolls
of 625 municipalities at the parcel level and provide the first
province-wide ratio study of vertical and horizontal assessment equity for
a Canadian province. Because the \textit{Loi sur la fiscalit\'e
municipale} pins every roll to a single statutory market-condition date,
municipality~$\times$~roll~$\times$~sale-year fixed effects separate the
mechanical drift of ratios between reference dates from within-market
inequity by design. The central finding is that the measured degree of
regressivity hinges on the treatment of extreme assessment ratios. Under a
lenient 1/99 trim, the within-market elasticity of the assessment ratio
with respect to price is $-0.34$ ($-0.08$ under a rank instrument in the
spirit of Clapp, 1990) and 95\% of municipalities fall below the IAAO
price-related-bias band. Under the IAAO outlier rule, which removes 9\% of
sales concentrated in the bottom price decile, the elasticity is $-0.09$
($-0.01$ and insignificant under the instrument), the province-wide PRB is
$+0.02$, the COD is 17, and three quarters of municipalities meet the
vertical-equity standard. A piecewise specification shows that
proportionality holds across the upper 80\% of each market's price
distribution and fails only in the bottom quintile. Two patterns are
invariant to the trimming rule: condominiums are assessed proportionally
while single-family homes, plexes, older buildings, land-heavy properties
and small municipalities remain mildly regressive, and within-municipality
price-related bias widened in 2021--2022 when the post-pandemic boom pulled
prices away from the rolls. The implied overpayment by the bottom
within-market price decile ranges from about 6\% to 65\% depending on
whether extreme-ratio sales are treated as market transactions, and the top
decile underpays by 3--5\%; narrowing that range requires sale-validation
data that Quebec's registries do not currently provide.}

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\input{sections/results}
\input{sections/robustness}
\input{sections/discussion}
\input{sections/conclusion}

\appendix
\input{appendix/appendix}

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