On April 29, 2025, the Court of King’s Bench of Alberta released its decision in Ross v Canmore (Town), 2025 ABKB 258 (“Ross”), in which the Court upheld the Town of Canmore’s (the “Town”) new vacancy tax. As a result, Canmore homeowners who leave their residence in the Town empty for most of the year can expect to see an increase in their property taxes beginning in 2026.
The new vacancy tax was established by Bylaw 2024-19 (the “Bylaw”), which divides residential property into five new subclasses:
Under the new tax scheme, each of the above residential properties falls within a subclass that has its own respective tax rate. In relation to Primary Residential property, the Town intends that this subclass will have a lower tax rate than some or all of the other subclasses. Practically speaking, this means that full-time residents will pay on average $2,100.00/year in property taxes, while part-time residents can anticipate paying around $6,300.00/year.
According to the Bylaw, Primary Residential property is property where a person ordinarily resides and conducts their daily affairs for at least 183 cumulative days (or half) of a calendar year of which 60 days are continuous. The vacancy tax can be avoided if this criteria can be met.
The vacancy tax is part of the Town’s Housing Action Plan, which aims to curb the Town’s affordability crisis. Specifically, and since 2006, the price of housing in the Town has risen by 65% compared to the provincial average of 37%. In 2024, the median assessed value for a single-family home was more than $1 million and a quarter of the Town’s homes were owned by part-time residents. The Town predicts the vacancy tax raising around $12 million annually for local affordable housing projects.
Since the Town unveiled the Bylaw, the Town’s residents have argued that the tax is unnecessarily divisive and unfairly punishes faithful property taxpayers. In the Ross decision, a group of residents and developers brought the Bylaw before the Court for judicial review in an effort to quash the tax. The Applicants’ position with respect to the Bylaw included that:
Ultimately, the Court decided that, with respect to the issues above, the implementation of the vacancy tax is a valid use of the Town’s authority.
In reaching its decision, the Court cited Section 297(2) of the MGA which allows municipalities to divide residential property into subclasses on “any basis it considers appropriate.” The Court took a liberal approach to interpreting this provision, reasoning that it reflects the intention to give municipalities broad authority to create residential subclasses.
Further, the Court found that the Town distinguishes property owners based on the way they use their property and not their personal characteristics, a basis that the MGA endorses.
However, the Court decided that the Town must wait until 2026 to start the new taxing scheme to give property owners the opportunity to organize their affairs to follow the Bylaw.
As of May 2025, a group of roughly 1,000 Canmore residents called Fair Future Canmore have taken the initial steps to appeal the Court’s decision. The group calls for a housing strategy that includes all the Town’s residents and homeowners, both part-time and full-time, as well as provincial and federal support.
In response to opposition, Canmore Mayor Sean Krausert states that the tax is not an attack on part-time homeowners, calling it a necessary response to the impact of increasing part-time homeownership on the Town’s housing market. Former Mayor Ron Casey supports Krausert’s position but wants to know how the Town intends to hold itself accountable on how the money is spent. Casey feels this is a sentiment echoed by part-time homeowners.
Ultimately, Canmore homeowners with property in the Town sitting vacant for more than half the year should prepare to pay the vacancy tax beginning in 2026. If they wish to avoid the tax, they should consider taking steps to satisfy the Primary Residential property requirements.
Author:
Kristen Farmer, Summer Student