Ontario Rent Increase 2026: Guideline Rate, Calculator and How to Apply

What Is the 2026 Ontario Rent Increase Guideline?

Every year the Ontario government publishes a rent increase guideline under the Residential Tenancies Act, 2006 (RTA). For 2026, the guideline is 2.5%. This is the maximum percentage most landlords can increase rent without applying to the Landlord and Tenant Board (LTB) for special approval.

The guideline is based on the Ontario Consumer Price Index (CPI) and is capped at 2.5% by legislation. Even if inflation runs higher, the guideline cannot exceed 2.5% for units that fall under rent control.

Which Units Does the Guideline Apply To?

The 2.5% guideline applies to most residential rental units in Ontario that were first occupied before November 15, 2018. This includes apartments, houses, basement units, and condos rented out by individual landlords.

Units that are exempt from the guideline include:

• Units first occupied for residential purposes on or after November 15, 2018
• Community housing and non-profit housing cooperatives
• Commercial properties
• Long-term care homes

If your unit was built or converted to residential use after November 15, 2018, you can increase rent by any amount as long as you follow proper notice rules. There is no cap for these newer units.

How to Calculate Your Rent Increase for 2026

The calculation is simple. Multiply the current monthly rent by 1.025 to get the new amount.

Example:

• Current rent: $1,800/month
• Calculation: $1,800 x 1.025 = $1,845
• New rent: $1,845/month

You can use our rent increase calculator for Ontario landlords to get the exact figure instantly. Just enter your current rent and the tool does the math, including showing the dollar amount of the increase.

Common Calculation Mistakes

• Applying the guideline to the original lease amount instead of the current rent
• Rounding up incorrectly (always round to two decimal places)
• Stacking increases from multiple years in a single notice
• Including parking or utility charges that are separate from base rent

Steps to Legally Increase Rent in Ontario

You cannot simply tell your tenant the rent is going up. Ontario law requires a specific process.

Step 1: Confirm Eligibility

Make sure at least 12 months have passed since the tenancy began or since the last rent increase. You can only raise rent once every 12 months.

Step 2: Fill Out the N1 Form

The N1 form (Notice of Rent Increase) is the official document you must use. It is available on the LTB website. Fill in the tenant's name, the rental unit address, the current rent, the new rent amount, and the effective date of the increase.

Step 3: Give 90 Days Written Notice

You must serve the N1 at least 90 days before the increase takes effect. For example, if you want the new rent to start on July 1, 2026, you need to serve the notice no later than April 2, 2026.

Step 4: Serve the Notice Properly

You can serve the N1 by handing it directly to the tenant, sliding it under the door of the rental unit, or sending it by mail. If you mail it, add five extra days for delivery, meaning you need to mail it at least 95 days before the effective date.

Step 5: Keep Your Records

Keep a copy of the signed N1 and note the date and method of service. If a dispute ever reaches the LTB, your documentation is your proof.

What If 2.5% Is Not Enough?

If you have had extraordinary expenses such as major capital repairs, significant increases in property taxes, or large security cost increases, you may be eligible for an above guideline increase (AGI). This requires a separate application to the LTB using form L5, and the Board will review your expenses before approving any amount above the 2.5% guideline.

Read our complete guide to above guideline rent increases in Ontario for details on the AGI process.

What Happens If You Do Not Follow the Rules?

If you increase rent without proper notice, without using the N1 form, or by more than the guideline for rent-controlled units, the tenant can file a T1 application with the LTB. The Board can order you to return the excess rent collected and may impose additional penalties.

Tenants are not required to pay any rent increase that was not properly noticed. Getting the process right protects you legally and avoids costly disputes.

Frequently Asked Questions

Can I increase rent mid-lease?

No. Rent can only be increased after the initial lease term ends and the tenancy converts to month-to-month, or at the renewal of a fixed-term lease. You still need to follow the 12-month and 90-day notice rules.

What if my tenant refuses to pay the increase?

If you served a valid N1 with proper notice and the tenant refuses to pay the new amount, the unpaid portion accumulates as arrears. You can then serve an N4 for non-payment and pursue the matter through the LTB.

Does the guideline apply to parking and storage?

If parking or storage charges are part of the rent under the lease, they are included in the total rent subject to the guideline. If they are separate charges under separate agreements, the rules differ.

Can I bank unused increases from previous years?

No. If you did not increase rent in a given year, you cannot add that year's guideline to a future increase. Each year's guideline applies only to that year.

Key Takeaways

• The 2026 Ontario rent increase guideline is 2.5%
• It applies to most units first occupied before November 15, 2018
• Use the N1 form and give at least 90 days notice
• You can only increase rent once every 12 months
• For increases above 2.5%, you must apply to the LTB for an above guideline increase