% Author: Simon-Pierre Boucher — contact@spboucher.ai
% ============================================================================
\section{Institutional setting: property assessment in Quebec}
\label{sec:inst}

Quebec's municipal fiscal regime is governed by the \textit{Loi sur la
fiscalit\'e municipale} (LFM) and operationalized by the province's
assessment manual, the \textit{Manuel d'\'evaluation fonci\`ere du
Qu\'ebec} \citep{lfm2026, mamh2024manuel}. Four features matter for the
measurement design of this paper.

\paragraph{Triennial rolls.} Every municipality's assessment roll is
redrawn on a fixed three-year cycle by a municipal body or a contracted
private firm under the responsibility of a chartered evaluator. The roll
lists, for each assessment unit, the taxable value of the property and its
decomposition into land and building components, along with the structural
descriptors used in valuation (lot area, floor area, year of construction,
number of dwelling units, physical configuration, and a standardized use
code, the CUBF).

\paragraph{A statutory market-condition date.} Article 46 of the LFM
requires that the values entered on a roll reflect the state of the market
\emph{eighteen months before} the roll takes effect: a roll entering force
on January~1 of year $t$ must value every property as of July~1 of year
$t-2$. This single reference date is printed on the roll itself and is
common to every property in the municipality. Two implications follow.
First, in a rising market the \emph{level} of assessment ratios drifts
mechanically below one as sales occur further from the reference date ---
between 18 and 54 months elapse between the reference date and a sale, 36
months at the median in our sample. This drift is a feature of the system,
not an inequity, and our empirical design absorbs it entirely with
municipality~$\times$~roll~$\times$~sale-year fixed effects. Second, and
crucially, \emph{within} such a block every property shares the same market
vintage, so cross-sectional patterns in ratios cannot be attributed to
timing.

\paragraph{Uniform taxation of the rolled value.} The municipal levy on a
residential property is the rolled taxable value multiplied by the
municipal rate (plus school taxes levied on the same base). There are no
assessment-growth caps, homestead exemptions, or acquisition-value rules of
the Californian or Floridian type: relative taxable values within a
municipality equal relative assessed values. This makes the mapping from
assessment error to tax-burden redistribution exact --- a property assessed
10\% above the jurisdiction's median ratio pays 10\% more tax than uniform
assessment would imply --- and motivates the tax-shift calculation of
Section~\ref{sec:results}.

\paragraph{Oversight and appeal.} The Ministry of Municipal Affairs (MAMH)
prescribes methods and audits rolls; owners may request an administrative
review and appeal to the Tribunal administratif du Qu\'ebec. Appeal rates
for residential property are low. Unlike several U.S. jurisdictions
studied in the literature \citep{plummer2014evidence,
avenancio2022assessment}, Quebec's appeal system plays a minor quantitative
role for the housing stock at large, which makes the valuation model
itself --- rather than post-assessment litigation --- the natural locus of
any inequity we measure.

Taken together, these institutions imply that Quebec should be a
\emph{best-case} environment for assessment equity: uniform provincial
methodology, professional certification, statutory synchronization of
market vintage, and a tax that consumes the rolled value without
exemption-driven distortions. The magnitude of the inequity we document
below should be read against this backdrop.
