For most Ontario landlords, the rent increase guideline is the ceiling on how much a sitting tenant's rent can go up in a 12-month period without approval from the Landlord and Tenant Board. Each year the province fixes a new figure, as s. 120 of the Residential Tenancies Act, 2006 (RTA) requires: 1.9% for 2027, down from 2.1% for 2026. Below you will find how the figure is calculated, the rates for past years, the units it does not reach, and how to line up a lawful increase with an N1 notice.
At a glance
| Topic | Rule |
|---|---|
| Rate for 2027 | 1.9% |
| Rate for 2026 | 2.1% |
| Highest the guideline can be | 2.5% (s. 120(2)) |
| Frequency of increases | No more than once in 12 months (s. 119) |
| Notice | 90 days or more, in writing, on the LTB's form (s. 116) |
| Form | Usually the N1; the N2 for units exempt from the limits; the N3 for care homes |
| Biggest exemption | Post-November 15, 2018 units under s. 6.1 (by date of first residential occupancy) |
| Exceeding it | Only through an N10 agreement or an LTB order on an L5 |
Where the number comes from
Section 120(2) ties the guideline to the Ontario Consumer Price Index. The figure for a given calendar year is the average year-over-year change in that index across the 12 months up to and including May of the prior year, rounded to one decimal place, and it can never go above 2.5%. By August 31 of the preceding year, the Minister has to publish it in The Ontario Gazette (s. 120(3)), after which it appears on the Ministry of Municipal Affairs and Housing's residential rent increases page.
The governing rate is the one for the year the new rent starts, not the year the notice goes out. To illustrate: a tenancy that began on March 1, 2026 at $2,400 a month can go up on March 1, 2027 by that year's 1.9%, which is $45.60, for new rent of $2,445.60.
Rates by year
| Year | Rate | Year | Rate |
|---|---|---|---|
| 2027 | 1.9% | 2019 | 1.8% |
| 2026 | 2.1% | 2018 | 1.8% |
| 2025 | 2.5% | 2017 | 1.5% |
| 2024 | 2.5% | 2016 | 2.0% |
| 2023 | 2.5% | 2015 | 1.6% |
| 2022 | 1.2% | 2014 | 0.8% |
| 2021 | 0% (freeze; formula gave 1.5%) | 2013 | 2.5% |
| 2020 | 2.2% | 2012 | 3.1% |
The provincial page goes back further, to 1991. The 2021 freeze was enacted directly in the statute (s. 120(3.1)). S.O. 2012, c. 6 inserted the 2.5% cap into s. 120, which is why the 3.1% figure for 2012, set before the cap took effect, exceeds it.
Which tenancies it governs
Most private residential units under the RTA are covered: houses, apartments, basement units, condos, mobile homes, land lease communities, and care homes (for the rent portion only). Its limits protect sitting tenants, and assignees who take over an existing tenancy (s. 120(1)).
Three groups fall outside it.
New tenants. Section 113 treats whatever rent is first charged to a new tenant as lawful, so on turnover the starting figure is a matter of agreement.
Units exempt under s. 6.1. Neither the guideline nor the above-guideline rules apply if residential occupancy of the building, mobile home park or land lease community (or of the addition holding the unit) first began after November 15, 2018, with no part of it lived in on or before that date. A second exemption applies to some added units in row, semi-detached and detached houses that had two units at most as of that date. The added unit has to have been finished after November 15, 2018, and either built into formerly unfinished space or first occupied at a time when an owner was living in another unit in the house. A tenancy agreement made on or before November 15, 2018 is not exempt under either branch (s. 6.1(4)).
Long-term care homes, community housing and rent-geared-to-income units, each governed by its own regime.
In any dispute, proving the exemption is the landlord's job. The province recommends holding on to plans, permits for building and occupancy, warranty paperwork for the new home, contractor or builder invoices, and photographs taken before and after, and recording the exemption in the additional terms section of the standard lease. If you are ever before the LTB on this question, those records are the evidence.
Rules that bind even exempt units
Whether or not the guideline caps the amount, three requirements remain.
- Twelve months between increases (s. 119). Count from the tenant's last increase or from the start of the tenancy. If the unit was assigned in the meantime, count from the prior tenant's last increase.
- Ninety days' written notice (s. 116). It must be given on the LTB's approved form and must state the new rent. Without proper notice the increase is void, and a fresh notice has to be served (s. 116(4)).
- The right form. The standard notice is the N1. The N2 is aimed at units outside the limits on increases, and its instructions describe partially exempt housing such as social and non-profit units. The N3 serves care homes. Because the N2 instructions were written in May 2017, ahead of s. 6.1, and the LTB has published nothing on which notice it wants for an s. 6.1 unit, confirm with the LTB before serving.
On its hearing-process page, the LTB states that for a unit first occupied after November 15, 2018, "the landlord must still give at least 90 days' notice in writing of any rent increase using the proper form but there is no limit on the size of the rent increase."
Lining up the N1
- Choose the effective date. It has to be 12 or more months after the previous increase (or the tenancy's start), and it is normally the first day of a rent period.
- Work back 90 days. The N1 must be given no later than 90 days before that date.
- Allow for delivery. Under s. 191(3), mailed notice counts as given five days after posting, so a mailed N1 needs to go out 95 or more days in advance. For a March 1, 2027 increase, that means handing it over by December 1, 2026, or mailing it by November 26, 2026.
- Use a permitted method. The N1 instructions permit handing it to the tenant (or an adult in the unit), leaving it where mail is normally left, sliding it through a mail slot or beneath the door, or sending it by fax, mail or courier. Taping it to the door is not allowed.
- Get the arithmetic right. Multiply the current lawful rent by the rate for the year the new rent begins. On a covered unit, any excess is unlawful.
A tenant who gets the N1 and does not respond with a notice of termination is deemed to have accepted the increase the Act permits (s. 118). Section 136 then makes the increase lawful if a year passes from the first time it was charged without an application by the tenant.
Raising rent above the guideline
On a covered unit there are two lawful ways to go higher.
By agreement: the N10 (s. 121). Landlord and tenant may agree to an above-guideline increase in return for a defined capital expenditure, or for an additional or new service. It is capped at the guideline plus 3% of the prior lawful rent. The tenant has five days after signing to cancel in writing, and the new rent cannot begin earlier than the sixth day after signing. This increase needs no N1.
By application: the L5 (s. 126). A landlord may apply to the LTB on three bases: eligible capital expenditures, operating costs for outside security services, or an extraordinary rise in municipal taxes and charges. The capital and security portion cannot exceed the guideline by more than 3% in a 12-month period; anything beyond that rolls into the following two periods, at no more than 3% in each. Even then, an N1 has to be served 90 or more days ahead; see L5 and LTB filing fees for the application side.
A separate category sits outside both the 12-month rule and the 90-day notice. Section 123 lets the parties agree to add parking or some other prescribed service, with the rent rising by the prescribed amount.
Two connected rules that are easy to miss
Interest on rent deposits. A last month's rent deposit earns annual interest at whatever guideline rate applies when the interest falls due (s. 106(6)), which is 1.9% for 2027. Under s. 106(7), you can retain part or all of it to bring the deposit up to the current monthly rent.
Air conditioners. From July 1, 2026, where electricity is part of the rent, landlords may impose a seasonal increase for a window or portable air conditioner the tenant has installed. Interpretation Guideline 11 explains how.
Frequently asked questions
What is Ontario's guideline for 2027?
The Ministry of Municipal Affairs and Housing has published 1.9%. The 2026 figure was 2.1%.
Since the cap is 2.5%, can I simply raise rent by 2.5%?
No. The 2.5% figure caps the guideline, not your increase. For a covered unit the limit is that year's guideline, with only an L5 order or an N10 agreement allowing more.
The unit was first rented in 2020. Is it subject to the guideline?
Possibly not. Section 6.1 exempts it if nobody lived in any part of the building (or addition) on or before November 15, 2018. Even so, you still need the proper form, 90 days' written notice and 12 months between increases.
What if my N1 was served too late?
Under s. 116(4), that increase is void. Serve a new N1 that allows the full 90 days, with a later effective date.
Can the rent go up when a tenant leaves?
Yes. Under s. 113, a new tenant's rent is whatever is first charged, subject to any LTB order that applies to the unit.
Official sources
- Residential rent increases (Ontario Ministry of Municipal Affairs and Housing)
- Residential Tenancies Act, 2006, ss. 6.1, 106, 113, 116, 118–121, 123, 126, 136, 191
- N1 Notice of Rent Increase and instructions
- N2 instructions
- Interpretation Guideline 11 (seasonal air conditioner charges)
- LTB Application and hearing process