spb/wp10_uqo Public

1% Author: Simon-Pierre Boucher — contact@spboucher.ai2% ============================================================================3\section{Institutional setting: property assessment in Quebec}4\label{sec:inst}56Quebec's municipal fiscal regime is governed by the \textit{Loi sur la7fiscalit\'e municipale} (LFM) and operationalized by the province's8assessment manual, the \textit{Manuel d'\'evaluation fonci\`ere du9Qu\'ebec} \citep{lfm2026, mamh2024manuel}. Four features matter for the10measurement design of this paper.1112\paragraph{Triennial rolls.} Every municipality's assessment roll is13redrawn on a fixed three-year cycle by a municipal body or a contracted14private firm under the responsibility of a chartered evaluator. The roll15lists, for each assessment unit, the taxable value of the property and its16decomposition into land and building components, along with the structural17descriptors used in valuation (lot area, floor area, year of construction,18number of dwelling units, physical configuration, and a standardized use19code, the CUBF).2021\paragraph{A statutory market-condition date.} Article 46 of the LFM22requires that the values entered on a roll reflect the state of the market23\emph{eighteen months before} the roll takes effect: a roll entering force24on January~1 of year $t$ must value every property as of July~1 of year25$t-2$. This single reference date is printed on the roll itself and is26common to every property in the municipality. Two implications follow.27First, in a rising market the \emph{level} of assessment ratios drifts28mechanically below one as sales occur further from the reference date ---29between 18 and 54 months elapse between the reference date and a sale, 3630months at the median in our sample. This drift is a feature of the system,31not an inequity, and our empirical design absorbs it entirely with32municipality~$\times$~roll~$\times$~sale-year fixed effects. Second, and33crucially, \emph{within} such a block every property shares the same market34vintage, so cross-sectional patterns in ratios cannot be attributed to35timing.3637\paragraph{Uniform taxation of the rolled value.} The municipal levy on a38residential property is the rolled taxable value multiplied by the39municipal rate (plus school taxes levied on the same base). There are no40assessment-growth caps, homestead exemptions, or acquisition-value rules of41the Californian or Floridian type: relative taxable values within a42municipality equal relative assessed values. This makes the mapping from43assessment error to tax-burden redistribution exact --- a property assessed4410\% above the jurisdiction's median ratio pays 10\% more tax than uniform45assessment would imply --- and motivates the tax-shift calculation of46Section~\ref{sec:results}.4748\paragraph{Oversight and appeal.} The Ministry of Municipal Affairs (MAMH)49prescribes methods and audits rolls; owners may request an administrative50review and appeal to the Tribunal administratif du Qu\'ebec. Appeal rates51for residential property are low. Unlike several U.S. jurisdictions52studied in the literature \citep{plummer2014evidence,53avenancio2022assessment}, Quebec's appeal system plays a minor quantitative54role for the housing stock at large, which makes the valuation model55itself --- rather than post-assessment litigation --- the natural locus of56any inequity we measure.5758Taken together, these institutions imply that Quebec should be a59\emph{best-case} environment for assessment equity: uniform provincial60methodology, professional certification, statutory synchronization of61market vintage, and a tax that consumes the rolled value without62exemption-driven distortions. The magnitude of the inequity we document63below should be read against this backdrop.64