How Much Can a Landlord Increase Rent in Ontario?

Condo1 TeamLandlord TipsJanuary 15, 2026

Ontario's 2026 Rent Increase Guideline

For 2026, the Ontario rent increase guideline is 2.1%. This is the maximum amount most landlords can raise rent without approval from the Landlord and Tenant Board (LTB).

The guideline is calculated using Ontario's Consumer Price Index (CPI), based on inflation data from June 2023 to May 2024. By law, the guideline is capped at 2.5%, regardless of how high inflation rises. This cap protected tenants during the high-inflation years of 2023 to 2025, when the guideline would have exceeded 2.5% without it.

Here's how the guideline has changed in recent years:

Year	Guideline
2026	2.1%
2025	2.5%
2024	2.5%
2023	2.5%
2022	1.2%
2021	0% (COVID-19 freeze)

The 2026 rate of 2.1% is the lowest since the pandemic freeze in 2021.

Rules for Increasing Rent in Ontario

Ontario's Residential Tenancies Act (RTA) sets clear rules for rent increases. Landlords must follow all of them for an increase to be valid.

12-month rule: Rent can only be increased once every 12 months. The increase must take effect at least 12 months after the tenant moved in or after the last rent increase, whichever is later.

90-day written notice: Tenants must receive written notice at least 90 days before the increase takes effect. Count the days carefully. 89 days is not enough, and the increase would be invalid.

Use Form N1: The notice must be given using the official LTB Form N1 (Notice of Rent Increase). Text messages, emails, phone calls, and informal letters do not count. Only the N1 form is legally valid for rent-controlled units.

What makes a valid N1:

Current rent amount
New rent amount
Effective date of the increase
Landlord's signature

If any of these elements are missing or incorrect, the tenant is not obligated to pay the higher amount.

Ontario rent increase guidelines for landlords

Units Exempt from Rent Control

Not all rental units in Ontario are subject to the annual guideline. The most significant exemption applies to units first occupied for residential purposes after November 15, 2018.

If your unit falls into this category, you can increase rent by any amount, not just 2.1%. However, you must still:

Provide 90 days' written notice
Use Form N2 (not N1) for exempt units
Limit increases to once every 12 months

This exemption follows the unit, not the tenant. If the building was first occupied after November 15, 2018, every future tenant in that unit is subject to the exemption, even if they moved in years later.

Other exempt units include:

Community housing
Non-profit housing co-operatives
Long-term care homes
Commercial properties

If you're unsure whether your unit is exempt, check when the building or unit was first occupied for residential purposes. New construction, converted units, and additions completed after November 2018 typically qualify.

Above-Guideline Increases

In certain situations, landlords can apply to the LTB for a rent increase above the annual guideline. This is called an Above-Guideline Increase (AGI).

Common reasons for an AGI:

Major capital repairs or renovations (new roof, elevator, windows)
Significant increases in municipal property taxes
Significant increases in utility costs (for buildings with utilities included)
Security services

The LTB typically caps AGIs at 3% above the guideline per year. For large capital expenditures, the increase may be spread over three years.

To apply, landlords must file Form L5 with the LTB, notify all affected tenants, and provide documentation such as invoices, contracts, and tax bills. The LTB will schedule a hearing where tenants can dispute the application.

AGI applications can take several months to process, sometimes over a year. The process is complex, and approval is not guaranteed.

Common Mistakes to Avoid

These errors can invalidate a rent increase or create legal problems:

Using informal notice: A text, email, or letter is not valid. You must use Form N1 (or N2 for exempt units). No exceptions.

Not giving 90 full days: If you serve notice on January 15 for an April 1 increase, that's only about 75 days. The increase is invalid. Count carefully from the date the tenant receives the notice.

Trying to combine missed increases: If you didn't raise rent in 2025, you cannot add that year's guideline to your 2026 increase. Missed increases are not cumulative. You can only apply the current year's guideline.

Exceeding the guideline without approval: For rent-controlled units, you cannot charge more than 2.1% in 2026 unless you have LTB approval for an AGI. Charging 3% or 5% because you made repairs is illegal without that approval.

Assuming a new tenant means no rent control: Rent control follows the unit, not the tenant. If the unit was first occupied before November 15, 2018, the guideline applies to every tenant, including new ones.

Confusing N1 and N2 forms: N1 is for rent-controlled units. N2 is for exempt units. Using the wrong form can invalidate your notice.

What Tenants Should Know

If you receive a rent increase notice, verify that it meets all legal requirements:

Is it on Form N1 or N2?
Does it provide at least 90 days' notice?
Has it been at least 12 months since your last increase (or move-in)?
Is the increase at or below the guideline (2.1% for 2026)?

If the increase doesn't meet these requirements, you are not obligated to pay the higher amount. You can continue paying your current rent.

If you believe you've been overcharged, you can file a T1 application with the LTB to request a rent rebate. Under Ontario law (Bill 184), you have 12 months from the date of the illegal increase to file this application. After 12 months, you lose the right to recover overpaid rent.

For official forms and more information, visit Tribunals Ontario or Ontario.ca.