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Tourist Home? Residential Use? What Canmore Property Owners Need to Know About Recent Land Use Changes: Understanding Canmore's Evolving Land Use Designation for Tourist Accommodations

In Canmore, we often refer to "zoning" when talking about how a property can be used — but technically, that's not the correct term here. The Town of Canmore uses land use designations under its Land Use Bylaw (LUB), which carry the same purpose: regulating what kind of development and activity is permitted on a property. So while “zoning” isn’t official terminology, it’s commonly used in real estate and by the public because it gets the point across.

One designation that’s been under increasing scrutiny is Tourist Home, which allows a dwelling unit to be used for both full-time living and short-term rental (e.g., Airbnb or VRBO). This hybrid use is rare — and valuable — but recent changes to the Land Use Bylaw and taxation structure are poised to significantly reshape how these properties are used and valued.

So, What’s Changing?

Over the past year, the Town has made a clear policy shift to discourage short-term rentals in residential areas. Key changes include:

  • Tourist Homes will no longer be allowed as a permitted use going forward, meaning no new Tourist Home properties will be approved. Existing ones will be “legally non-conforming,” meaning you can keep operating — but if you stop renting it short-term for six consecutive months, you lose the right.

  • All Tourist Homes will now be taxed at the non-residential rate, regardless of how the owner personally uses the home. Previously, owners could self-declare personal use and pay the lower residential rate. That subclass has now been eliminated.

  • You can voluntarily convert your Tourist Home to residential, and the Town has waived the rezoning application fees (until December 31, 2026). But — and this is important — this decision is irreversible. Once a Tourist Home is converted to residential, it cannot be converted back.

What If You Use Your Tourist Home as a Full-Time Residence?

If you own a Tourist Home but don’t actually rent it out short-term — maybe you live there full-time or rent to a long-term tenant — this change presents a tough choice.

On paper, converting it to a residential designation saves you money on your property tax bill (since non-residential mill rates are about 3x higher). But here's the trade-off: you’ll almost certainly lose resale value.

Tourist zoned homes in Canmore typically sell for 20–30% more than comparable residential properties, simply because of that short-term rental flexibility. That’s a huge premium. If you bought when the market had already priced in that flexibility (and especially if you paid peak market rates), giving up that designation could actually put you underwater if you ever need to sell.

It’s a personal choice:

  • Save thousands each year in taxes but risk tens (or hundreds) of thousands in equity

  • Or pay the higher tax rate and preserve the property’s full market value

Some owners might find a balance by keeping the Tourist designation but renting out their unit during personal vacations or shoulder seasons to offset the tax hit. That was, after all, the original spirit of the designation — not full-time Airbnb hotelization, but part-time flexible use. The rise of online booking platforms changed the game, but the core model still works.

Opinion: This Isn’t Going to Help Local Housing Inventory

Let’s call a spade a spade — I don’t believe this policy change will result in more long-term housing options for locals.  And I don’t think it’s going to bring down housing prices, even for this one segment of the market.

Why? Because:

  • The value of these properties is in the Tourist designation.

  • Removing the residential tax subclass removes the incentive to use it long-term.

  • Most owners who bought these units as investments won’t willingly devalue them by 20–30% just to save on taxes.

If anything, this change may prompt the opposite effect: owners who were using the property residentially or renting to long-term tenants may now pivot to short-term rentals to justify the higher tax bill. Those tenants could be displaced.

And from a market economics perspective, here’s the kicker: supply of Tourist Homes is now capped. Aside from a limited number in already-approved ASPs like Three Sisters, we won’t see new Tourist Homes in the future. But demand for them isn’t going anywhere. That scarcity will only drive their value higher over time — further incentivizing owners to hold onto the designation, not give it up.

I appreciate that the Town wants more transparency and planning clarity. And yes, for the small number of owners who truly just want to live in the unit and never rent it, this might feel like an easy win. But from where I stand? It feels like a well-intentioned move that could backfire — and actually reduce available long-term housing.

In Summary

If you own a Tourist Home in Canmore, now’s the time to reassess your strategy. Talk to your accountant & a local REALTOR® who understands the nuances of our market (👋), and weigh your long-term goals carefully.

Questions? Curious what your home’s designation means for value? Happy to chat anytime.

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New Legislation Addressing the Housing Crisis in BC: Implications for Alberta's Real Estate Landscape

British Columbia (really most of Canada) is grappling with a severe housing crisis, marked by a shortage of affordable long-term rentals and attainable housing options. This crisis is significantly exacerbated by the rise of short-term rentals, where over 16,000 entire homes are being used for this purpose, making it increasingly challenging for residents to secure affordable housing. In response, the BC government has introduced the Short-Term Rental Accommodations Act to alleviate the housing crisis by returning valuable housing inventory to the long-term rental market. These new regulations have the potential to ripple into Alberta, as investors may seek opportunities beyond BC's borders and international visitors may look for more stable and affordable rental opportunities when planning a trip to Canada.

BC's Housing Crisis

The scarcity of affordable housing, including long-term rentals, has become a pressing issue in British Columbia. Short-term rentals, particularly entire homes, are viewed as a major contributor to the problem, occupying housing units that could otherwise serve residents seeking stable accommodations. Local governments have taken steps to regulate short-term rentals, but enforcement of these bylaws remains a challenge, prompting a call for additional resources and tools.

Primary Goals of the Legislation

The newly introduced regulatory measures have three key objectives:

  1. Returning Units to the Long-Term Rental Market: The most critical goal is to return short-term rental units to the long-term rental market. By achieving this, British Columbia hopes to mitigate the housing shortage, ensuring that more affordable housing options become available to residents through existing dwellings with new construction and development opportunities not keeping up with current demand.

  2. Empowering Local Governments: These regulations aim to provide local governments with the tools needed to enforce short-term rental bylaws effectively. This empowerment allows local authorities to address the housing crisis at the community level.

  3. Provincial Oversight: These regulations establish a provincial role in the oversight of short-term rentals, ensuring that standards and compliance are consistent across the province.

Scope of the Regulations

The new rules encompass all short-term rentals offered to the public, including various platforms like Airbnb, VRBO, Expedia, and other web listings such as Facebook Marketplace, Kijiji, and Craigslist.  However, specific exemptions include reserve lands, Nisga’a Lands, Treaty Lands of a Treaty First Nation (unless a coordination agreement is established with the Province), hotels, and motels.  The new legislation doesn’t apply to any municipalities with a population of less than 10,000 that aren’t immediately adjacent to larger municipalities (ie. greater Vancouver area), any of the 14 designated resort communities (Fernie, Golden, Harrison Hot Springs, Invermere, Kimberley, Osoyoos, Radium, Revelstoke, Rossland, Sun Peaks, Tofino, Ucluelet, Valemount, and Whistler) or are an Agri-tourism business. 

Key Changes and Implications

The new regulations introduce several significant changes, including:

  1. Strengthened Enforcement Tools: Regional districts will witness a substantial increase in the maximum fines for bylaw violations, rising from $2,000 to up to $50,000. This aligns with municipalities under the Community Charter, equipping local governments with more robust enforcement capabilities.

  2. Business Licensing Authority: Regional districts will gain the authority to regulate and license short-term rentals, similar to municipalities, under amendments to the Local Government Act. This ensures a uniform approach to regulation.

  3. Display of Business License: In areas where a business license is required, short-term rental hosts must display a valid business license number on their listings, enhancing transparency.

  4. Platform Accountability: Listings without a valid business license, where required, must be removed by the short-term rental platform at the request of the local government.

  5. Data Sharing: Short-term rental platforms are obligated to share listing information with the Province, which is then shared with local governments to facilitate effective bylaw enforcement.

Returning Units to Long-Term Rental Market

To fulfill the goal of returning units to the long-term rental market, the regulations implement a provincial principal residence requirement. This requirement limits short-term rentals to the host's primary residence, along with one secondary suite or accessory dwelling unit. The principal residence requirement applies province-wide in municipalities with a population of 10,000 and over, and adjacent communities.

Exemptions for specific areas or accommodation types may be defined in future regulations. Local governments can also request to "opt in" to or "opt out" of the principal residence requirement, depending on local vacancy rates.

Provincial Oversight

To ensure compliance with the new rules, the Province will establish a short-term rental registry. Hosts will need to include a provincial registration number on their listings, along with their business license number if required. Short-term rental platforms must validate these numbers against the provincial registry data.

Additionally, a provincial compliance and enforcement unit will be established to track compliance, issue orders, and administer penalties for violations.

Implications for Alberta

The introduction of these regulations in BC has sparked discussions about potential implications for Alberta's real estate landscape. As investors in BC navigate the changing regulatory environment, Alberta may emerge as an attractive destination for those seeking new opportunities in the short-term rental market. The possibility of a more stable regulatory environment in Alberta, combined with the potential for increased demand in this sector, could lead to investors selling their BC properties and venturing into Alberta or other parts of Canada.  The stringent limitations on short-term rentals in BC may divert tourism dollars to other regions in Canada, like the Bow Valley, where a wider range of more affordable accommodation options are available, potentially attracting more visitors and bolstering local tourism economies.

If you are looking to purchase a vacation rental property in Canmore, you may want to secure a purchase sooner than later in the event that we do see an influx of BC investors looking to move their for profit housing investments to other markets. 

For prospective homebuyers in Canmore, the impact of BC investors shifting their focus to the Bow Valley should be minimal. Canmore has been proactive in addressing short-term rentals long before online platforms like Airbnb and VRBO became popular. The town's Land Use Bylaws have already established clear guidelines for short-term rentals – a property must have "Visitor Accommodation" or "Tourist Home" designated as a permitted use. Licensing requirements, much like those soon to be introduced in BC, have been in place for years. These regulations are aimed at preserving existing residential inventory from being converted into short-term rentals and safeguarding long-term renters from potential displacement by landlords seeking higher profits through short-term rentals. While tackling the housing crisis is crucial, Canmore's unique challenges are driven by various factors, including residential properties that remain vacant and a focus on Visitor Accommodation developments rather than residential ones, which does not effectively address the town's supply issue or provide affordable housing for its residents. Adopting a similar approach to BC's Short-Term Rental Accommodation Act wouldn't provide a viable solution to Canmore's housing crisis, as the town has already implemented similar control mechanisms to prevent or discourage the conversion of long-term rentals into short-term ones.

Conclusion

BC's new regulations for short-term rentals represent a concerted effort to address the housing crisis by returning valuable housing inventory to the long-term rental market. While the impact on BC's real estate and tourism industries is evident, the implications for Alberta may include an influx of investors looking for more favorable conditions. As these regulations unfold over the next two years, it's essential to stay informed about how they shape the real estate landscapes in both provinces, working toward a balance that benefits residents, investors, and the broader community.

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