Ontario Rent Increase Guide: Rules, Notice & Rent Control

Estimated reading time: 9 minutes

Rent increases in Ontario are governed by the Residential Tenancies Act, 2006 . For landlords, that means increasing rent involves more than choosing a new monthly amount. The timing of the increase, the notice given to the tenant, the type of rental unit and whether the property is subject to Ontario's annual rent increase guideline all matter.

This guide explains how rent increases work for most Ontario residential tenancies, including rental properties in Toronto. It covers the annual guideline, timing and notice requirements, rent-control exemptions, Landlord and Tenant Board forms and Above-Guideline Increases.

What is the current Ontario rent increase guideline?

Ontario establishes a rent increase guideline for each calendar year. For most rent-controlled residential units, the guideline is the maximum percentage by which a landlord can increase the lawful rent without approval from the Landlord and Tenant Board.

The 2027 Ontario rent increase guideline is 1.9%. Because the guideline changes annually, landlords should confirm the applicable rate before preparing a rent increase notice.

The guideline that applies is based on the year in which the increase takes effect, not simply the year in which the notice is given.

To calculate the eligible increase using the applicable annual rate, use LandLord's Ontario Rent Increase Calculator .

How often can a landlord increase rent in Ontario?

In most cases, at least 12 months must have passed before another rent increase can take effect.

The 12-month period is generally measured from:

• The date the tenant first began renting the unit, if there has not yet been a rent increase; or
• The date the tenant's last lawful rent increase took effect.

A new calendar year does not restart the rent increase clock. A landlord cannot automatically increase every tenant's rent simply because Ontario has published a new annual guideline.

Which year's rent increase guideline applies?

The applicable guideline is based on the calendar year in which the rent increase takes effect.

This distinction matters when notice is given near the end of a calendar year. If an eligible increase takes effect during the following year, the guideline for that following year generally applies to a rent-controlled tenancy.

Ontario publishes the current guideline and general requirements on its residential rent increases page.

How much notice is required for a rent increase?

Ontario landlords must generally provide at least 90 days' written notice before a rent increase takes effect.

Ninety days is not necessarily the same as three calendar months. Landlords should calculate the effective date carefully and account for any applicable rules relating to how the notice is served.

The 90-day notice requirement does not replace the 12-month rule. Both requirements generally need to be satisfied before the new rent can take effect.

Which rent increase form should landlords use?

The Landlord and Tenant Board provides different notices depending on the rental unit and how Ontario's rent increase rules apply to it.

Two commonly used forms are:

• N1 – Notice of Rent Increase: generally used where the rental unit is subject to Ontario's rules limiting the amount of the rent increase.
• N2 – Notice of Rent Increase (Unit Partially Exempt): used in certain situations where the rental unit is exempt from the rules limiting the amount of the increase.

Other forms can apply in specific circumstances. Landlords should obtain the current notice and instructions directly from Tribunals Ontario rather than relying on an older saved copy.

Which Ontario rental properties are subject to rent control?

Most residential rental units covered by Ontario's Residential Tenancies Act are subject to the annual rent increase guideline.

Certain newer rental units, however, may be exempt from the annual guideline. This can include qualifying new buildings, additions and rental units first occupied for residential purposes after November 15, 2018.

What does a rent-control exemption mean?

For a qualifying guideline-exempt unit, the annual provincial percentage generally does not cap the amount of the rent increase.

That does not mean a landlord can increase the rent whenever they want or without notice.

The landlord must still generally:

• Wait at least 12 months after the tenancy begins or the previous lawful rent increase;
• Give at least 90 days' written notice; and
• Use the appropriate Landlord and Tenant Board notice.

Whether the exemption applies depends on the relevant residential occupancy history. It is not determined simply by when the current owner purchased the property.

How do you calculate an Ontario rent increase?

For a rent-controlled tenancy, the increase is calculated using the tenant's current lawful monthly rent and the guideline that applies to the year in which the increase will take effect.

The basic calculation is:

Current lawful rent × applicable guideline = maximum guideline increase

The increase is then added to the current rent to determine the new monthly amount.

LandLord's Ontario Rent Increase Calculator can perform the calculation using the applicable annual guideline.

Can a landlord increase rent above the guideline?

In certain circumstances, a landlord can apply to the Landlord and Tenant Board for permission to increase rent above the annual guideline. This is known as an Above-Guideline Increase, or AGI.

The Landlord and Tenant Board's L5 application identifies specific categories that can support an AGI application, including:

• An extraordinary increase in municipal taxes and charges;
• Certain new or increased security-service operating costs; and
• Eligible capital expenditures completed at the residential complex.

Higher mortgage payments, ordinary inflation, general operating costs or a desire to bring an existing tenant's rent closer to current market rent do not by themselves create a right to an Above-Guideline Increase.

Landlords considering an AGI should review the current L5 application instructions before proceeding.

Does a landlord have to justify a rent increase?

Generally, no. For a standard lawful rent increase, a landlord does not usually need to provide a separate explanation of why the rent is being increased.

The important legal questions are whether the increase is permitted and whether the landlord has complied with the applicable timing, notice and form requirements.

An Above-Guideline Increase is different because the landlord must meet one or more of the grounds permitted by the Residential Tenancies Act and apply to the Landlord and Tenant Board.

Even where an explanation is not legally required, some landlords choose to communicate the increase with a long-term tenant. For more on that narrower question, see Do Landlords Have to Justify a Rent Increase in Ontario? .

Can a landlord set a new rent when the tenant changes?

Ontario's annual rent increase rules primarily regulate increases during an existing tenancy.

When a genuinely new tenancy begins with a new tenant, the lawful rent for the first rental period is generally the rent first charged under that tenancy, subject to any specific legal restrictions or orders that may apply to the unit.

This is different from a renewal, extension or continuation of the same tenancy. A landlord cannot simply treat an existing tenancy as new in order to avoid the rent increase rules.

Does a tenant need to sign a new lease after a rent increase?

No. A routine lawful rent increase does not require the landlord and tenant to enter into another fixed-term lease simply because the monthly rent has changed.

When a fixed-term tenancy reaches the end of its term and has not otherwise been lawfully terminated, it generally continues as a month-to-month tenancy.

Does a landlord have to take the full guideline increase?

No. The annual guideline is generally the maximum permitted increase for a rent-controlled tenancy without LTB approval. It is not a mandatory annual increase.

A landlord can choose a smaller increase or decide not to increase the rent at all.

Whether taking the maximum makes financial sense depends on factors such as the existing rent, comparable properties, current rental-market conditions, tenant quality and the potential cost of turnover.

For a more detailed look at that decision, see Should You Raise Rent? A Decision Framework for Toronto Landlords .

Common rent increase mistakes landlords should avoid

Using the wrong guideline year

The applicable guideline is based on when the increase takes effect, rather than simply when the notice is prepared.

Increasing rent before 12 months have passed

A new calendar year does not restart the rent increase clock. Confirm when the tenancy began or when the previous lawful increase took effect.

Treating 90 days as automatically equal to three months

Calculate the notice period using the actual dates and account for the applicable service rules.

Assuming a newer unit has no rent increase rules

A guideline exemption affects the amount of the increase. It does not generally eliminate the timing, notice or form requirements.

Assuming below-market rent changes the rules

A rent-controlled tenancy does not become exempt from the guideline simply because the tenant is paying less than current market rent.

Using an outdated Landlord and Tenant Board form

Forms and instructions can change. Use the current version provided by Tribunals Ontario.

Ontario rent increase checklist for landlords

1. Confirm the tenant's current lawful rent.
2. Confirm the tenancy start date or the date the previous lawful rent increase took effect.
3. Make sure at least 12 months will have passed before the new increase takes effect.
4. Determine whether the rental unit is subject to Ontario's annual rent increase guideline.
5. Confirm which annual guideline applies to the effective date.
6. Calculate the permitted increase.
7. Select the appropriate Landlord and Tenant Board notice.
8. Provide at least 90 days' written notice and account for the applicable service rules.
9. Keep a copy of the notice, calculation and relevant tenancy records.

Frequently Asked Questions About Ontario Rent Increases

How often can a landlord increase rent in Ontario?

In most cases, at least 12 months must have passed since the tenancy began or since the tenant's previous lawful rent increase before another increase can take effect.

How much notice does a landlord need to give?

A landlord must generally provide at least 90 days' written notice using the appropriate Landlord and Tenant Board form.

Which year's rent increase guideline applies?

The guideline for the calendar year in which the rent increase takes effect generally applies to an eligible rent-controlled tenancy.

Does rent control apply to every Ontario rental property?

No. Certain rental units first occupied for residential purposes after November 15, 2018 may be exempt from the annual guideline. Other timing, notice and form requirements can still apply.

Can a landlord increase rent by any amount on a guideline-exempt unit?

The annual percentage guideline may not cap the increase for a qualifying exempt unit, but the landlord must still generally comply with the 12-month timing rule, provide at least 90 days' written notice and use the appropriate form.

Does a landlord need to explain why rent is being increased?

A standard lawful rent increase does not generally require a separate justification. An Above-Guideline Increase is different and must meet the applicable legal requirements.

Does a tenant need to sign a new lease after a rent increase?

No. A routine lawful rent increase does not require a new fixed-term lease simply because the monthly rent changes.

Can rent be increased above the annual guideline?

In certain circumstances, yes. A landlord can apply to the Landlord and Tenant Board for an Above-Guideline Increase based on one or more of the grounds permitted under the Residential Tenancies Act.

Does a landlord have to take the full guideline increase?

No. The annual guideline is generally a maximum, not a mandatory rent increase.

Where can landlords calculate the permitted increase?

Use LandLord's Ontario Rent Increase Calculator to calculate an eligible guideline increase using the applicable annual rate.

This article provides general information about Ontario residential rent increases and is not legal advice. Individual properties and tenancies may be subject to different rules, exemptions or orders. Confirm the current Residential Tenancies Act and Landlord and Tenant Board requirements before serving a rent increase notice.