Canmore is a key destination for recreational properties and tourist-oriented rentals. The numbers of tourist homes and short term accommodations have been growing in Canmore over the past decade. Tourist homes rose about 33% from 2013 to 2022, while short-term accommodations grew 25% from 2014 to 2022.
However, Canmore’s housing and rental market is undergoing significant changes, with a housing action plan that includes new policies reshaping how properties can be used and taxed.
These shifts directly impact owners of recreational and rental properties. The changes center around three key areas: adjustments to tourist home regulations, incentives for primary residence occupancy, and new incentives for purpose-built rental developments.
Tourist Homes: Higher Taxes and New Restrictions
Starting in 2025, all tourist homes in Canmore will be taxed at the non-residential rate. A tourist home is a specific property designation in Canmore under its land use bylaw. Previously, owners could declare personal use and benefit from lower residential tax rates, but this option will no longer be available. The non-residential rate, approximately three times higher than the residential rate in 2024, will now apply uniformly to all tourist homes.
The process for converting a tourist home to residential use has been simplified, with the conversion fee waived until December 31, 2026. This allows owners to shift their properties into residential use more easily, avoiding the higher tax rate.
Further restrictions are planned for tourist homes under Canmore’s Land Use Bylaw. New tourist homes will no longer be permitted, and residential properties cannot be converted into tourist homes moving forward. Existing tourist homes will retain their designation, but these changes aim to effectively cap future growth in this property category. This may encourage current tourist home owners to not convert it to residential use, despite the increased tax rates.
Owners of tourist homes operating as short-term rentals must also meet stricter licensing requirements. Each unit will require its own business license, and the license number must be displayed in all advertisements. Properties failing to comply with these rules may face fines or other enforcement actions.
The higher taxes and enhanced regulations for tourist homes will mean increased costs and administrative responsibilities. However, the streamlined conversion process offers an alternative path for those willing to transition to residential use.
Livability Tax: Higher Costs for Vacant or Seasonal Properties
Canmore’s new Livability Tax Program introduces a tiered tax structure for residential properties, depending on their use. Homes occupied full-time, defined as at least 183 cumulative days per year, with a minimum of 60 consecutive days, will qualify for a lower tax rate on the municipal portion of their property tax bill.
Owners of vacant, seasonal, or infrequently used homes will face higher taxes, with the additional revenue directed toward housing initiatives in the community. This change will apply to the 2025 tax year, with all property owners required to declare their occupancy status annually by December 31.
Owners renting their properties full-time to tenants who meet the primary residence requirements can avoid the higher tax rate. Properties that do not meet the occupancy requirements, such as seasonal rentals, recreational properties used only occasionally by owners, or homes left vacant, will incur increased costs.
The declaration process is mandatory, and failure to submit it will automatically result in higher taxes. Owners who cannot meet the occupancy criteria may qualify for specific exemptions, such as those for properties undergoing renovations, recently sold homes, or owners facing medical challenges.
Incentives for Purpose-Built Rentals
Canmore has introduced a grant program for purpose-built rental developments. This initiative offers a financial incentive, aiming to encourage investing in rental housing. Qualifying properties can receive a grant equivalent to 75% of their municipal property taxes for up to ten years.
To be eligible, properties must:
- Provide at least three rental units, with 95% of units rented to long-term tenants who are primary residents of Canmore.
- Involve new construction, significant renovations, or the addition of rental space to existing buildings.
- Have a construction value of $300,000 or more.
Grant eligibility begins once the development receives an occupancy certificate, and property owners must submit annual reports confirming compliance with program requirements.
What These Changes Mean for Property Owners
For short-term rentals, higher taxes and stricter licensing requirements will increase operating costs, potentially making these properties less profitable. Meanwhile, the elimination of new tourist homes as a permitted use also limits certain opportunities.
Owners of seasonal, recreational and other properties that are not occupied full-time will face higher taxes under the Livability Tax Program; on the other hand, those interested in long-term rentals may be able to access incentives. The incentives for purpose-built rentals will reduce the financial burden of new developments, making it easier to generate returns while meeting Canmore’s growing housing needs.