Ontario’s rent increase guideline is the maximum percentage a landlord can raise rent for a sitting tenant in a given year, and it’s set by the province every year, not chosen by any individual landlord. For 2026, that guideline is 2.1%, the lowest it’s been in four years. Whether that number actually applies to your unit, and what your landlord has to do before an increase takes effect, depends on rules that are easy to misread in both directions. This guide covers what the guideline is, how the province arrives at it, which units it doesn’t cover at all, and what happens when a landlord wants to raise rent by more than it allows. For the wider picture of renting in Toronto, see our complete Toronto real estate guide.
What Ontario’s rent increase guideline actually is
The guideline is a ceiling, not a target and not a requirement. It caps the maximum percentage a landlord can raise rent for an existing tenant during an ongoing tenancy, set once a year by the provincial government under the Residential Tenancies Act and its regulations. A landlord doesn’t have to raise rent by the full guideline amount, or at all, and plenty don’t in any given year. What the guideline actually controls is the ceiling: a landlord covered by it cannot legally ask a sitting tenant for more than that percentage in a single year without going through a separate, formal process described further down.
One distinction trips up almost everyone new to renting in Ontario. The guideline caps what a landlord can raise an existing tenant’s rent by. It says nothing about what a landlord can ask a brand new tenant to pay once a unit turns over. A landlord can list a newly vacant unit at whatever the market will bear, guideline or no guideline, and that becomes the rent the new lease starts from. That’s also why a long-term tenant’s rent and a newly listed unit in the same building can look nothing alike: one reflects years of capped annual increases stacked on an old starting rent, the other reflects today’s market.
The 2026 guideline, and how it’s calculated
Ontario’s own published rent increase guideline for 2026 is 2.1%, down from 2.5% in 2025 and the lowest figure the province has set in four years. On a $2,000 monthly rent, that’s the difference between a $50 allowable increase under 2025’s guideline and a $42 increase under 2026’s.
The province doesn’t set this number by discretion. It’s calculated under Ontario Regulation 516/06 from the average of Ontario’s Consumer Price Index over a defined 12-month measurement period, and by law it can never exceed 2.5% no matter how high inflation actually runs in that period, a statutory ceiling written into the Residential Tenancies Act itself. For most of the past several years, actual inflation ran high enough that the calculated guideline landed at or near that 2.5% cap. The 2026 figure is a genuine result of the calculation coming in below the cap, not the province choosing a lower number for any other reason.
Which units the guideline does not cover
The guideline only applies to rental units first occupied for residential purposes on or before November 15, 2018. If a unit was first lived in after that date, a situation common in newer condo towers and purpose-built rental buildings across Toronto, the guideline cap doesn’t apply to it at all. A landlord of an exempt unit can raise a sitting tenant’s rent by any amount they choose, with no percentage ceiling, though the same notice requirements described below still apply regardless of which category a unit falls into.
It’s worth checking when your specific building was first occupied if you’re unsure which category applies to you, since the difference changes what a legal increase can actually look like for your unit. A newer building being exempt from the guideline doesn’t mean anything else about your tenancy is unprotected. The notice rules, the deposit rules, and the rest of the Residential Tenancies Act’s protections still apply in full. Only the annual percentage ceiling itself is what the exemption removes.
How much notice a landlord must give, and how often
A landlord has to give at least 90 full calendar days’ written notice before a rent increase takes effect, using the Landlord and Tenant Board’s official Form N1. A verbal heads-up doesn’t satisfy this requirement, and a notice that gives fewer than 90 days isn’t valid regardless of how it’s delivered. Rent can only be increased once every 12 months for the same tenant, so even a landlord who follows every other rule correctly can’t raise the same tenant’s rent twice inside a single year.
If a notice arrives with fewer than 90 days on it, without Form N1, or with an increase above what’s legally allowed for a unit the guideline actually covers, a tenant isn’t required to treat it as valid. The Landlord and Tenant Board’s own rent increase page sets out exactly what a compliant notice has to include, and it’s the authoritative place to check before assuming any notice you’ve received is enforceable.
Can a landlord raise rent above the guideline
Yes, but only through a formal application, not by simply deciding to. A landlord who wants to raise a covered unit’s rent above the guideline has to apply to the Landlord and Tenant Board using Form L5, an Application for a Rent Increase Above the Guideline. That application has to rest on one or more specific, defined grounds: an extraordinary increase in the municipal taxes or charges for the building, security service costs the building is facing for the first time or at a higher level than before, or eligible capital expenditure work, meaning major repairs, replacements or additions expected to last at least five years, not routine maintenance. A landlord can’t apply for an above-guideline increase tied to work completed before a specific tenant’s own tenancy began.
The Board reviews the application against the eligible costs and the legal limits set out in its own regulations before deciding what increase, if any, is actually allowed. This is a real process with real requirements, not a formality a landlord can complete on their own. A tenant who receives notice of an above-guideline application has the right to review it and respond through the Board’s own process rather than simply accepting the number a landlord has proposed.
Frequently asked questions
What is Ontario’s rent increase guideline?
It’s the maximum percentage a landlord can raise rent for a sitting tenant in a given calendar year, set annually by the provincial government under the Residential Tenancies Act and Ontario Regulation 516/06. The guideline is a ceiling, not a requirement: a landlord doesn’t have to raise rent by the full amount, or at all, in any given year. It applies only to increases for an existing tenant during an ongoing tenancy and has no bearing on what a landlord can charge a brand new tenant once a unit becomes vacant, which is set by whatever the market will bear at the time. Understanding which of these two situations applies to you is the first step in knowing what a legal rent increase can actually look like.
What is the rent increase guideline for 2026, and how is it calculated?
The 2026 guideline is 2.1%, down from 2.5% in 2025 and the lowest figure in four years. The province calculates it under Ontario Regulation 516/06 from the average of Ontario’s Consumer Price Index over a defined 12-month measurement period, with a statutory cap of 2.5% written into the Residential Tenancies Act that the guideline can never exceed regardless of how high inflation actually runs. For several recent years, actual inflation ran high enough that the calculated figure landed at or near that cap. The 2026 number reflects the calculation genuinely coming in lower, not a discretionary decision by the province to set a smaller figure.
Which rental units are exempt from the rent increase guideline?
Units first occupied for residential purposes after November 15, 2018 are exempt from the guideline’s percentage cap entirely, a situation common in newer condo towers and purpose-built rental buildings. A landlord of an exempt unit can raise a sitting tenant’s rent by any amount, with no ceiling tied to the guideline, though the same 90-day written notice requirement still applies regardless of exemption status. Units first occupied on or before that date remain covered by the annual guideline percentage. If you’re unsure which category your unit falls into, checking when the building or unit was first occupied for residential purposes settles the question, since the exemption is based on that date rather than on the unit’s age in general terms.
How much notice does a landlord have to give before raising rent, and how often can rent go up?
A landlord must give at least 90 full calendar days’ written notice using the Landlord and Tenant Board’s official Form N1 before any rent increase takes effect, whether the increase falls within the guideline or is an approved above-guideline amount. A verbal notice doesn’t count, and anything giving less than 90 days isn’t valid. Rent can only be raised once every 12 months for the same tenant, meaning even a landlord following every rule correctly can’t increase the same tenant’s rent twice within a single year. A tenant who receives a notice that’s missing the correct form, gives insufficient notice, or exceeds what’s legally allowed isn’t required to treat it as binding.
Can my landlord raise my rent above the guideline?
Only by applying to the Landlord and Tenant Board using Form L5, an Application for a Rent Increase Above the Guideline, and only on specific grounds: an extraordinary increase in municipal taxes or charges, new or increased security service costs, or eligible capital expenditure work expected to last at least five years. A landlord can’t simply decide to charge more than the guideline allows without going through this process, and the Board reviews the application against the eligible costs and legal limits before approving any specific amount. A tenant who receives notice of such an application has the right to review and respond to it through the Board’s own process rather than accepting the proposed figure automatically.
The guideline tells you the ceiling. What you’re actually paying, or actually charging, depends on when your unit was first occupied, whether any notice you’ve received is valid, and whether an above-guideline application is genuinely in progress. If you’re weighing whether to keep renting or start looking at buying instead, our guide to how much rent actually costs in Toronto and our guide to renting an apartment in Toronto step by step cover the rest of what you need. Search current Toronto rental listings on TorontoProperty.ca, or browse our full library of Toronto real estate guides.