Canmore, Canada Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Canmore, Canada?

Short-term rentals like Airbnb and VRBO have become increasingly popular in recent years. However, many cities and towns, including Canmore, Canada, have implemented regulations to govern these types of rentals. Here's what you need to know about short-term rental regulations in Canmore.

Starting a Short-Term Rental Business in Canmore

Canmore has very specific zoning rules that dictate where short-term rentals are allowed to operate. The two types of Canmore real estate that can allow for Airbnb, VRBO, or other short-term rentals are properties zoned as Tourist Homes and Hotel Condominiums.

Tourist Homes are perhaps the most flexible zoning for short-term rentals in Canmore. This zoning permits not only full-time living, but also long-term and short-term rentals (nightly or weekly), whether owner-managed or through a professional management company. However, these properties are taxed at a higher rate than residentially zoned homes.

Hotel Condominiums, on the other hand, are zoned primarily as commercial properties. The intent of these properties is to be used only as short-term rentals, meaning stays of up to 30 days at a time. Owners technically cannot live in these units on a full-time or primary basis.

It's important to note that nightly rentals are only allowed in these specially zoned areas in Canmore. You cannot book, advertise, take deposits, or payments via Airbnb in other residential zones. The town has been known to issue $2,500 fines for first offenses of illegally listing a property on Airbnb or VRBO, with subsequent fines of $5,000.

To legally start a short-term rental in Canmore, property managers (whether an individual owner or formal business) must obtain a business license from the town. One license covers all managed properties. Bed and Breakfasts also require a separate business license and development permit.

In summary, Canmore has strict zoning laws that limit short-term rentals to Tourist Homes and Hotel Condos only. Significant fines exist for illegally listing properties in other zones. Proper business licensing is required to operate. Prospective hosts should carefully review the regulations before investing in a Canmore rental property.

Short-Term Rental Licensing Requirement in Canmore

According to the Town of Canmore's official website, property managers, whether an individual property owner or a formal business, that manage one or more short-term rental properties within Canmore require a business license. If the owner has hired a third-party property manager or their unit is part of a building's rental pool, the third party or building property manager requires the business license, and the owner does not.

To apply for a business license, property managers must submit an application package for a license that best suits the location of their property management business. For example, if they manage rentals from their home or office in Canmore, they should apply for a Resident Business License. The fees for an annual Resident Business License start at $130. For a micro-business grossing less than $30,000 per year, the annual fee is reduced to $32.50.

The application package must include:

• Completed application form
• Certificate of Incorporation, if applicable
• Proof of residence (driver's license or lease agreement)
• List of all short-term rental properties under management

Applications can be submitted by mail or email to the address listed on the form. The Town states that processing time is up to 5 business days based on complete application packages.

One business license is intended to cover all properties managed by that individual or company. To add a new property to an existing license, property managers can submit an updated property list with only the new units.

Bed and Breakfast establishments have additional licensing requirements, including obtaining a development permit and paying an annual license fee of $130 (or $32.50 for micro-businesses).

The Town of Canmore is known for strict enforcement of short-term rental regulations. Fines for operating without a valid license or in an area not zoned for tourist accommodation start at $2,500 for the first offense and increase to $5,000 for subsequent violations. The Town has issued fines to property owners simply for listing their unit on sites like Airbnb and VRBO without a warning.

In summary, short-term rental operators in Canmore must carefully review the licensing requirements and ensure their property is appropriately zoned before listing it for rent. With substantial penalties for non-compliance, it's critical to submit a complete business license application and keep it up-to-date with any changes in managed properties. Consulting with the Town's Planning and Development Department can help clarify the rules and requirements for a specific property.

Required Documents for Canmore Short-Term Rentals

According to the Town of Canmore's official website, property managers, whether an individual property owner or formal business, that manage one or more short-term rental properties within Canmore require a business license. The application package must include the following documents:

Business License Application Form: This form collects basic information about the business, such as the business name, owner details, and location. It's available on the Town of Canmore website under the "Permits and Licenses" section.

Proof of Residence: If the business is operated from a residential address in Canmore, proof of residence must be provided. Acceptable documents include a copy of a driver's license or lease agreement. This helps the town verify that the business is legitimately based in Canmore.

Short-Term Rental Property List: Property managers must submit a list of all the short-term rental properties they manage in Canmore. This allows the town to keep track of the number and location of active short-term rentals. The property list should be submitted with the initial application, and updated whenever a new property is added to the management portfolio.

For Bed and Breakfast (B&B) establishments, which are a type of short-term rental, additional documents are required:

Development Permit: All B&Bs in Canmore require a development permit. The application form, requirement list, and statutory declaration are available on the Town of Canmore website under "Permits and Licenses." This permit ensures the B&B meets zoning and land use requirements.

Alberta Health Services Approval: As part of the development permit process, B&Bs must obtain health and safety approval from Alberta Health Services. This ensures the establishment meets provincial health codes and is safe for guests.

Once the development permit is approved, B&B operators must also apply for a separate business license specific to B&Bs.

Other documents that may be requested as part of the business license application process include:

1. Proof of incorporation, if applicable
2. Floor plans or site maps
3. Parking plans
4. Fire safety plans

The exact requirements can vary based on the type and scale of the short-term rental operation. The Town of Canmore's Planning and Development Department is the best resource for the most up-to-date document checklist and application forms.

Failure to obtain the proper licenses and permits for a short-term rental can result in significant fines. The town has been known to issue $2,500 penalties for the first offense of operating without a valid permit, and $5,000 for subsequent violations. So it's critical for short-term rental operators to submit all the required documents and keep their licenses current.

Canmore Short-Term Rental Taxes

Short-term rental operators in Canmore are subject to several types of taxes at the municipal, provincial, and federal levels. Here's a breakdown of the key taxes that apply and their rates:

Municipal Property Tax: Short-term rental properties in Canmore are classified as either "Tourist Homes" or "Tourist Home - Personal Use" for property tax purposes. The tax rate depends on the classification:

1. Tourist Home (Code 21): 9.15981 mills (0.915981% of assessed value) in 2023
2. Tourist Home - Personal Use (Code 21A): 4.37305 mills (0.437305% of assessed value) in 2023

To qualify for the lower "Personal Use" rate, owners must submit an annual statutory declaration affirming the property will not be rented at all that year. If the property is rented, even for part of the year, the higher "Tourist Home" rate applies for the full year.

Alberta Tourism Levy: The province of Alberta requires short-term rental hosts to collect and remit a 4% tourism levy on the rental price of accommodations provided in Alberta for periods of less than 28 consecutive days. This levy is in addition to the federal GST.

Goods and Services Tax (GST): Short-term rentals are subject to the federal GST at a rate of 5% on the rental price. Hosts must register for, collect, and remit GST to the Canada Revenue Agency if their worldwide revenues from taxable supplies (including short-term rental income) exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters.

Possible Deductions and Write-Offs

Short-term rental hosts may be able to deduct certain expenses from their rental income to reduce their income tax liability. Some common deductible expenses include:

1. Advertising costs
2. Cleaning and maintenance
3. Insurance
4. Interest on loans used to purchase or improve the rental property
5. Management and booking fees
6. Property taxes
7. Repairs
8. Supplies for guests
9. Utilities

Expenses can only be deducted if they are incurred for the purpose of earning rental income. If the property is used personally for part of the year, expenses must be prorated accordingly. Hosts should keep detailed records and consult a tax professional to ensure they are claiming deductions correctly.

It's important to note that Canmore town council is considering policy changes that could significantly impact short-term rentals in the future, such as phasing out the "Tourist Home" designation and implementing a vacancy tax or incentives for returning properties to the long-term rental market. These changes could affect the tax treatment of short-term rentals. Hosts should monitor communications from the town and consult with local experts to stay informed of any developments.

Alberta Wide Short-Term Rental Rules

In addition to Canmore's local regulations, short-term rental hosts must also comply with provincial laws and requirements. Here are some key Alberta-wide rules that impact Canmore STR operators:

Alberta Tourism Levy: Starting July 1, 2023, short-term rental hosts in Alberta will be required to collect and remit a 4% tourism levy on the purchase price of accommodations provided for periods of less than 28 consecutive days. This levy is in addition to the federal GST. Hosts must register for the levy online with the provincial government.

There are some exemptions from the tourism levy, including accommodations provided to government entities, foreign diplomats, and Indigenous individuals or bands on reserve land. Stays of 28 days or more and low-cost accommodations under $30/day or $210/week are also exempt.

Residential Tenancies Act: While this act primarily governs long-term rentals, some provisions may apply to short-term rentals as well. For example, hosts must ensure the rental premises are habitable and meet minimum health and safety standards. Tenants have a right to peaceful enjoyment of the property.

Condominium Property Act: If a short-term rental is located in a condo, the host must comply with any restrictions or processes set out in the condo bylaws and the Condominium Property Act. This may include obtaining permission from the condo board, providing proof of insurance, and paying additional fees.

Business Licensing: Depending on the municipality, hosts may need to obtain a business license to operate a short-term rental legally. This is separate from the requirement to collect and remit the provincial tourism levy. Canmore, for example, requires STRs to have a business license.

Income Taxes: Income earned from short-term rentals is taxable and must be reported on the host's income tax return. Hosts can deduct eligible expenses to offset rental income. The Canada Revenue Agency has guidance on how to report rental income and what expenses can be claimed.

So, in summary, key provincial considerations for Canmore short-term rental hosts include registering for and collecting the new tourism levy, complying with residential tenancy and condominium laws, obtaining required local business licenses, and properly reporting rental income and expenses for tax purposes. Hosts should consult with local authorities and tax professionals to ensure they understand all applicable rules and requirements.

Does Canmore Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and Bigger Pockets, Canmore appears to be fairly strict in enforcing its short-term rental regulations compared to other cities. The town has cracked down significantly on illegal and unregulated vacation rentals in recent years.

According to posts on the Airbnb subreddit, Canmore has been known to issue $2,500 fines for first offenses of illegally listing a property on Airbnb or VRBO without the proper zoning and permits - and that's without any warning. Subsequent violations can result in even steeper penalties of $5,000.

One Canmore resident on Reddit shared their experience of being fined after a guest accidentally set off their security alarm, alerting town officials about their unauthorized short-term rental operation. The host lamented, "Thing that really bothers me is, Airbnb was perfectly legal here a year ago. Now my family and I are viewed as criminals by the town lol…It's really not fair in my opinion."

In a Bigger Pockets forum discussion about investing in Canmore, several posters cautioned that the town's strict zoning laws make it very difficult to operate short-term rentals legally. Only properties specifically zoned for tourist accommodation or as "tourist homes" are allowed to be used as short-term rentals.

One host noted, "Canmore as a town is pretty open and thorough with zoning and the rules. Short-term rental properties are one of the best ways to generate extra income, anywhere from hundreds to thousands per month. That being said, it's important to remember that, that income will also go to property taxes, utilities, and more."

So, while Canmore may be a desirable destination for tourists, the town is not particularly Airbnb-friendly from a regulatory perspective. The limited zoning for legal short-term rentals, strict enforcement, and hefty fines for violations make it a challenging environment for hosts.

Some hosts may still attempt to skirt the rules and operate under the radar, but they face significant risks if caught. The consensus from online forums is that Canmore is cracking down hard on illegal short-term rentals, so it's not advisable to try to beat the system. Prospective hosts should carefully review the zoning and licensing requirements before considering a short-term rental in Canmore.

How to Start a Short-Term Rental Business in Canmore

Starting a short-term rental business in Canmore can be a lucrative venture, but it's important to understand the local regulations and take the necessary steps to ensure compliance. Here's a step-by-step guide to getting started:

1. Research zoning regulations: Before investing in a property, thoroughly research Canmore's zoning laws and short-term rental regulations. Only properties zoned as "Tourist Homes" or "Hotel Condominiums" are allowed to operate as short-term rentals. Understand the specific rules for each zoning type.
2. Choose a property: Based on your research, select a property that is appropriately zoned for short-term rentals and aligns with your business goals. Consider factors like location, amenities, and potential rental income. Work with a local real estate agent who understands the short-term rental market.
3. Obtain necessary permits and licenses: Apply for a business license from the Town of Canmore. If you plan to manage multiple properties, one license can cover all of them. Submit a list of all properties you intend to manage as short-term rentals. For Hotel Condominiums, you may need to join a rental pool or obtain permission to self-manage.
4. Register for taxes: Register to collect and remit the 4% Alberta Tourism Levy on all short-term rental stays under 28 days. If your annual revenue exceeds $30,000, you must also register for and collect GST. Consult with a tax professional to ensure compliance.
5. Prepare the property: Furnish and equip your rental property to appeal to your target guests. Consider the amenities and services that will make your listing stand out, such as high-speed Wi-Fi, quality linens, and a well-stocked kitchen. Invest in professional photography to showcase your property's best features.
6. Create a listing: Set up a listing for your property on popular short-term rental platforms like Airbnb and VRBO. Craft a compelling description, set competitive rates, and establish house rules. Be transparent about your property's zoning and any restrictions guests need to know.
7. Develop a management plan: Decide how you will handle bookings, guest communication, cleaning, and maintenance. You can choose to self-manage or hire a professional property management company. If your property is a Hotel Condominium, you may have the option to participate in a rental pool.
8. Market your property: Promote your short-term rental through social media, targeted advertising, and by optimizing your listing for search engines. Encourage satisfied guests to leave reviews, which can help attract future bookings.
9. Comply with regulations and best practices: Regularly review Canmore's short-term rental regulations to ensure ongoing compliance. Follow best practices for guest screening, noise control, and neighborhood relations. Promptly address any issues or complaints that arise.
10. Monitor and adapt: Closely track your occupancy rates, revenue, and expenses. Analyze your performance and guest feedback to identify areas for improvement. Stay informed about market trends and regulatory changes that could impact your business, and be prepared to adapt your strategy as needed.

By following these steps and maintaining a commitment to compliance and guest satisfaction, you can build a successful short-term rental business in Canmore. Remember to consult with local authorities, real estate professionals, and legal and tax experts to ensure you have the most current and accurate information for your specific situation.

Who to Contact in Canmore about Short-Term Rental Regulations and Zoning?

If you have questions or concerns about short-term rental regulations and zoning in Canmore, here are some key contacts and resources:

Town of Canmore Planning & Development Department
Address: 902 7th Avenue, Canmore, AB T1W 3K1
Phone: 403-678-1543
Email: planning@canmore.ca
Website: https://canmore.ca/residents/residents-development-planning

The Planning & Development Department is responsible for administering and enforcing Canmore's Land Use Bylaw, which governs short-term rental zoning. They can provide information on zoning districts, permitted uses, development permits, and compliance.

Town of Canmore Business Licensing
Phone: 403-678-1523
Email: businesslicensing@canmore.ca
Website: https://canmore.ca/business/business-licenses

The Business Licensing department handles the licensing process for short-term rental operators. They can assist with questions about the application process, fees, and requirements for a valid license.

Town of Canmore Bylaw Services
Phone: 403-678-4244
Email: bylawservices@canmore.ca
Website: https://canmore.ca/town-hall/bylaws-enforcement

Bylaw Services is responsible for enforcing Canmore's municipal bylaws, including those related to short-term rentals. They investigate complaints and can issue fines for non-compliance. Contact them to report suspected illegal rentals or nuisance properties.

Useful Communities for Canmore Short-Term Rental Hosts

Bow Valley Home Owners and Residents Alliance (BOWDA) Facebook Group: https://www.facebook.com/groups/1104668626237576/

This group is for property owners and residents in Canmore and the Bow Valley area to discuss local issues, including short-term rental regulations.

Canmore Short-Term Rentals Facebook Group: https://www.facebook.com/groups/canmoreshortermrentals

A community for Canmore short-term rental owners and operators to network, share experiences, and stay informed about regulations and best practices.

/r/Canmore Subreddit: https://www.reddit.com/r/Canmore/

The Canmore subreddit occasionally has discussions related to short-term rentals and local bylaws. Use the search function to find relevant threads.

BiggerPockets Forums - Short-Term Rentals Sub-Forum: https://www.biggerpockets.com/forums/530-short-term-rentals

While not Canmore-specific, the BiggerPockets STR forum is a great place to connect with other vacation rental owners and learn about the industry in general.

These official Town of Canmore contacts and community groups can provide valuable information and support for navigating Canmore's short-term rental regulations. It's important to engage with local authorities and network with other hosts to stay compliant and successful in this market.

What Do Airbnb Hosts in Canmore on Reddit and Bigger Pockets Think about Local Regulations?

Airbnb hosts in Canmore have expressed mixed feelings about the town's short-term rental regulations on forums like Reddit and Bigger Pockets. While some appreciate the need for rules to protect housing supply, others find the restrictions overly strict. Here are some insights from local hosts:

On the Canmore subreddit, one prospective host asked about the feasibility of purchasing a condo in a tourist zone to operate as a vacation rental. Commenters cautioned that the town's zoning laws make it very difficult to operate short-term rentals legally, with only properties specifically zoned as "Tourist Homes" or "Hotel Condominiums" allowed to be used as STRs.

Another Redditor shared their experience of being fined after a guest accidentally alerted town officials about their unauthorized short-term rental operation. The host lamented, "Thing that really bothers me is, Airbnb was perfectly legal here a year ago. Now my family and I are viewed as criminals by the town lol…It's really not fair in my opinion."

In a Bigger Pockets forum discussion titled "Investment in canmore, Alberta real estate", a user asked for advice on investing in Canmore for cash flow purposes. Respondents noted that some buildings are strictly long-term rentals that may have rent control to accommodate seasonal staff and employees. They also mentioned that financing can be more challenging, with lenders often requiring a higher down payment (35%+) for properties zoned for nightly rentals.

On the AirBnB subreddit, hosts discussed Canmore's strict enforcement of short-term rental rules. One noted that the town has been known to issue $2,500 fines for first offenses of illegally listing a property without the proper zoning and permits, and $5,000 for subsequent violations.

So while there are differing opinions, the general sentiment among Canmore hosts on Reddit and Bigger Pockets is that the town's short-term rental regulations are quite restrictive compared to other markets. The limited zoning for legal STRs, strict enforcement, and steep penalties for non-compliance create significant barriers to entry.

However, some hosts still see investment potential, particularly in properties that are properly zoned and licensed. One Bigger Pockets user advised prospective buyers to work with a local real estate agent who understands the intricacies of Canmore's STR rules and market dynamics.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.