Ontario Rent Increase Guidelines 2026: What Landlords Need to Know

What Is the Rent Increase Guideline?

The Ontario rent increase guideline is a percentage set each year by the provincial government. It's the maximum amount most landlords can raise rent without getting approval from the Landlord and Tenant Board (LTB). For 2026, that number is 2.5%.

This guideline is calculated based on the Ontario Consumer Price Index (CPI). It reflects inflation and cost-of-living changes over the previous year. The government caps it at 2.5% even if inflation runs higher, which has been the case in recent years.

If you're a landlord in Ontario, understanding this number isn't optional. It's the foundation of your annual rent planning.

Who Does the Guideline Apply To?

The guideline applies to most residential rental units in Ontario. But there are important exceptions:

• Units first occupied after November 15, 2018 are exempt from rent control entirely. You can increase rent by any amount with proper notice.
• Community housing, long-term care homes, and commercial properties have separate rules.
• Vacant units can be re-listed at any price. The guideline only applies to sitting tenants.

For everything else, 2.5% is your ceiling unless you apply for an above-guideline increase.

How to Calculate Your New Rent

The math is straightforward. Take the current monthly rent and multiply by 1.025.

Here's a quick example:

• Current rent: $2,000/month
• New rent: $2,000 x 1.025 = $2,050/month

That's an extra $50 per month, or $600 per year. For a landlord with multiple units, this adds up fast.

You can use the BricksAbove rent increase calculator to get exact numbers for all your units at once. It handles the math and generates the right paperwork too.

Important Timing Rules

You can't just raise rent whenever you feel like it. Ontario law has strict timing requirements:

1. 12-month rule: You can only increase rent once every 12 months. The clock starts from either the last rent increase or the beginning of the tenancy, whichever is later.
2. 90 days' notice: You must give your tenant written notice at least 90 days before the increase takes effect. Use the N1 form (Notice of Rent Increase).
3. Proper form: The notice must be on the official N1 form. A text message, email, or verbal conversation doesn't count. If you don't use the right form, the increase is invalid.

Miss any of these requirements and you'll have to start over. That could mean waiting another full year.

Common Mistakes Landlords Make

After helping hundreds of Ontario landlords, we've seen the same errors come up again and again:

1. Not Giving Enough Notice

The 90-day requirement catches a lot of people off guard. If you want to raise rent on July 1, you need to deliver the N1 form by April 1 at the latest. Count backward from your target date and mark it on your calendar.

2. Using the Wrong Form

Some landlords send a letter or an email. That's not valid under the Residential Tenancies Act (RTA). You need the official N1 form. You can download it from the LTB website or generate it automatically through BricksAbove.

3. Raising Rent Too Soon

If a tenant moved in on March 1, 2025, the earliest you can increase rent is March 1, 2026. And you still need to serve notice 90 days before that. Jumping the gun is one of the fastest ways to end up at the LTB defending a bad-faith complaint.

4. Forgetting About Exempt Units

This one actually works in your favor. If your unit was first occupied after November 15, 2018, you're not bound by the 2.5% cap. You can increase by more. Many landlords don't realize this and leave money on the table.

What About Above-Guideline Increases?

Sometimes 2.5% isn't enough. If you've made significant capital improvements or your property taxes have jumped, you can apply to the LTB for an above-guideline increase (AGI).

Common reasons for an AGI include:

• Major repairs or renovations (new roof, plumbing overhaul, elevator modernization)
• Significant increases in municipal taxes and charges
• Rising utility costs that the landlord pays

The AGI process requires documentation, a formal application, and often a hearing. It can take several months. But for large expenses, it's worth pursuing. You can increase rent by up to an additional 3% per year above the guideline through an AGI, and the increase can be spread over three years.

We cover this topic in detail in our guide on above-guideline rent increases.

How to Stay Organized

Managing rent increases across multiple units gets complicated fast. Here's what we recommend:

1. Track every lease start date. You need to know when each tenant's 12-month window opens.
2. Set reminders 120 days out. This gives you a buffer to prepare and serve the N1 form before the 90-day deadline.
3. Keep copies of everything. If a tenant disputes the increase, you'll need proof of proper notice.
4. Use software to automate it. Tools like BricksAbove track your lease dates, calculate increases, and generate N1 forms automatically. It takes a five-minute task and makes it a 30-second one.

What Happens If You Don't Raise Rent?

Some landlords skip rent increases to keep good tenants happy. That's a valid strategy, but it comes with a cost. If you skip even one year, that lost income compounds. Over five years, skipping a 2.5% annual increase on a $2,000 unit means you're collecting roughly $3,000 less per year than you could be.

A better approach? Raise rent by the guideline amount every year, but invest in the property too. Tenants are more accepting of increases when they see improvements. Fresh paint, updated appliances, or responsive maintenance go a long way.

Need help with the numbers? Try our free rent calculator to analyze your property's financial performance.

Looking Ahead

The 2026 guideline of 2.5% is at the government-imposed cap. With inflation pressures and rising insurance and maintenance costs, many landlords feel squeezed. If that's you, it's worth exploring AGIs and making sure you're not leaving money on the table with exempt units.

Stay on top of your rent increases, use the right forms, and give proper notice. That's the formula. And if you want to make the whole process painless, give BricksAbove a try. It's built specifically for Ontario landlords who'd rather spend time on their properties than on paperwork.