Canmore Introduces New Housing Rules to Improve Housing Affordability

New short-term rental rules and vacancy tax are aimed at improving housing affordability in the Alberta tourism hot spot. 

By Brett Surbey | 4 minute read

A tourism-focused community known for its world-class skiing, Canmore is home to many short-term renters and vacation property owners. New rules could impact their renting costs. 

Canmore is one of the hottest tourist areas in Alberta throughout the summer and winter months. Beautiful mountain views, close proximity to major cities like Calgary, and first-class ski resorts make it a sought-after destination for tourists. But like other Alberta hot spots, Canmore is suffering from an affordability crisis. 

In 2023, a Livability Task Force was created by the Town Council to enhance Canmore’s livability while also improving its affordability. The task force set out to accomplish their objectives through three phases: 1. Develop a plan to phase out the Tourist Home Designation; 2. Investigate tax options to incentivize long-term occupancy of residential units, and; 3. Investigate tax options to incentivize purpose-built rental accommodation.”

Based on the task force’s recommendations, the town council moved to require short-term vacation rentals—zoned as tourist homes—to acquire a business license to continue to operate. The change is expected to result in the issuance of 650-700 new licenses, which will bring in around $97,500 in revenue for Canmore.

Town Council also approved an increase in the business license fee of 15%, which had not seen an increase since 2015, with hefty penalties for those who operate a tourist home without a license.  

Prior to the new rental rules, Canmore introduced a vacancy tax in August that takes effect in 2025. Property owners living in homes zoned for short-term rentals (“tourist homes”) can no longer declare their property for personal use. Instead, they will be taxed at three times that of residential properties in other subclasses.

Dan Sparks, a REALTOR® with Century 21 Canada in Canmore says the vacancy tax isn’t a new regulation and that it dates back to the 2008-09 financial crisis. “[Tourist homes] were always taxed at a higher rate to start with.”

He explains that when the recession hit, tourism suffered so the town put a system in place. “People were complaining that they weren’t able to rent the places they were living in…they didn’t feel they should be paying taxes for vacation rentals.”

Vacancy taxes are not permitted in Alberta, however, property subclasses — such as vacation properties— can be taxed at different rates under the Municipal Government Act (MGA).

Some real estate stakeholders have concerns about the impact of Canmore’s tax regulations on tourist homes. Barry Nestransky, a Canmore-based Realtor with RE/MAX Alpine Realty, sees the latest tax development as “double-edged.” “[Vacation property homeowners] aren’t here regularly, but when they do come, they spend money in the restaurants, buy our gas, use local trades to renovate,” he explains. “The two biggest industries in Canmore are tourism and construction, and they contribute to those.”

That said, Nestransky also understands that the town needs to create streams of revenue to be able to keep town infrastructure afloat. “When you have our town [population] ballooning up [during the tourist seasons], there’s a big impact [on infrastructure],” he says.

While Sparks feels conflicted about the tax, he sees it as a “necessary evil.” The lack of affordable housing is dire… so while the vacancy tax is not ideal, it’s a necessary evil.”