Rent going up this year? You're not alone. Every year, thousands of Ontario tenants receive rent increase notices and wonder whether the amount is legal. Understanding the rules protects you from paying more than you should.
This guide explains Ontario's 2025 rent increase guideline, who it applies to, how much notice landlords must provide, and what to do if your landlord raises rent illegally. Whether you're in a rent-controlled unit or a newer building, you'll know exactly where you stand.
Quick Answer: Ontario's rent increase guideline for 2025 is 2.5%. Landlords must provide 90 days written notice using Form N1 before raising rent. This limit applies to most rental units first occupied before November 15, 2018. Units built after that date are exempt from rent control. The 2026 guideline has been set at 2.1%.
The rent increase guideline is the maximum percentage landlords can raise rent each year without approval from the Landlord and Tenant Board. The Ontario government sets this limit annually based on the Ontario Consumer Price Index, which measures inflation.
The guideline applies to most private residential rental units covered by the Residential Tenancies Act. This includes apartments, houses, condos, and basement units rented out by landlords.
Each year, the Ministry of Municipal Affairs and Housing announces the guideline by August 31st. The rate takes effect on January 1st and applies to all rent increases during that calendar year. Even if inflation rises above the guideline, landlords cannot exceed this cap without going through an approval process.
The rent increase guideline for 2025 is 2.5%. This means if you pay $2,000 per month, your landlord can raise your rent by a maximum of $50, bringing your new rent to $2,050.
The 2.5% guideline is actually the maximum allowed by law. The Residential Tenancies Act caps the guideline at 2.5% regardless of how high inflation actually is. In years when inflation exceeds 2.5%, tenants are protected from larger increases.
Looking ahead, the 2026 guideline has been announced at 2.1%, slightly lower than 2025. This reflects the calculation based on Ontario's Consumer Price Index from June 2023 to May 2024.
Not all rental units in Ontario are protected by the 2.5% guideline. The key date is November 15, 2018. Units first occupied for residential purposes after this date are exempt from rent control.
If you moved into a brand new building after November 15, 2018, your landlord can raise rent by any amount with proper notice. This applies even if you're not the first tenant in that specific unit, as long as the building itself was first occupied after that date.
Your unit is likely rent-controlled if it was first occupied before November 15, 2018. This includes most older apartment buildings, houses converted to rentals before that date, and basement apartments that existed before then. For these units, landlords cannot increase rent by more than the guideline without Landlord and Tenant Board approval.
Several types of housing are exempt from the rent increase guideline. According to the Ontario government's official guidelines, exempt units include:
If you're unsure whether your unit is rent-controlled, check your lease or ask your landlord when the building was first occupied. You can also contact the Landlord and Tenant Board for clarification.
Landlords must follow specific rules when raising rent. Failing to meet these requirements makes the rent increase invalid, and you're not required to pay the higher amount.
Landlords must provide at least 90 days written notice before a rent increase takes effect. The notice must be given using the official Form N1, available from the Landlord and Tenant Board website.
A text message, email, or verbal conversation is not legally valid notice unless you have previously agreed in writing to receive notices electronically. If your landlord slides a handwritten note under your door, that's also invalid. Only Form N1 counts.
Landlords can only increase rent once every 12 months. The increase must occur at least 12 months after either the start of your tenancy or your last rent increase, whichever is later.
For example, if your lease started on March 1, 2024, your landlord cannot raise rent until March 1, 2025 at the earliest. And they would need to give you notice by December 1, 2024 (90 days before) for the increase to be valid.
A proper rent increase notice includes the correct Form N1, the date the increase takes effect, the new rent amount, the landlord's signature, and delivery at least 90 days before the effective date.
If any of these elements are missing, you can dispute the notice.
Yes, but only in specific circumstances. Landlords can apply to the Landlord and Tenant Board for an Above Guideline Increase (AGI) if they have qualifying reasons.
The Landlord and Tenant Board may approve increases above 2.5% for extraordinary increases in municipal taxes or charges, major capital expenditures like a new roof, elevator repairs, or plumbing replacement, and operating costs related to security services.
Landlords must apply using Form L5 and provide documentation proving these costs. The maximum additional increase is 3% per year above the guideline, and the landlord can phase in larger amounts over multiple years.
If your landlord applies for an Above Guideline Increase, you have the right to receive written notice of the application, attend the hearing at the Landlord and Tenant Board, present evidence disputing the landlord's claims, and request an inspection of the work completed.
Many AGI applications are disputed successfully when tenants can show the work was unnecessary, overpriced, or already required as part of normal maintenance.
The Advocacy Centre for Tenants Ontario (ACTO) provides resources for tenants facing AGI applications.
If your landlord didn't follow the proper rules, you have options. An illegal rent increase is void, and you're not required to pay the higher amount.
Rent increases are illegal if notice was given less than 90 days before the effective date, the landlord didn't use Form N1, the increase exceeds 2.5% without LTB approval (for rent-controlled units), rent was increased more than once in 12 months, or rent was increased during the first 12 months of your tenancy.
First, continue paying your original rent amount. You are not required to pay an invalid increase. Second, contact your landlord in writing explaining why the increase is invalid. Third, if the landlord insists, file a T1 Application with the Landlord and Tenant Board within 12 months to dispute the increase and recover any overpayments.
The LTB can order your landlord to return any excess rent you paid, plus interest.
Document everything. Save copies of your lease, all rent increase notices, payment records, and any communication with your landlord. These records protect you if you need to file a dispute.
Understanding recent trends helps you see where rent increases are heading. Here's how the guideline has changed over the past several years:
The 2021 rent freeze was a one-time measure during the COVID-19 pandemic. Since then, inflation has pushed the guideline to its maximum 2.5% cap for three consecutive years. The 2026 rate of 2.1% reflects slightly lower inflation in the calculation period.
Rent increases are part of renting in Ontario. While you can't avoid them entirely, you can make sure every dollar you pay works in your favor.
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Facing a rent increase? At least make sure those payments strengthen your financial future.
What is the rent increase guideline for 2025 in Ontario?
The Ontario rent increase guideline for 2025 is 2.5%. This is the maximum amount landlords can raise rent for most residential units without approval from the Landlord and Tenant Board. The guideline is calculated based on the Ontario Consumer Price Index and is capped at 2.5% regardless of actual inflation.
How much notice must my landlord give before raising rent?
Landlords must provide at least 90 days written notice before a rent increase takes effect. The notice must be given using the official Form N1 from the Landlord and Tenant Board. A text message, email, or verbal notice is not legally valid unless you've agreed to receive notices electronically.
Is my apartment exempt from rent control in Ontario?
Your unit is exempt from rent control if it was first occupied for residential purposes after November 15, 2018. This includes most new buildings, new additions to existing buildings, and new basement apartments completed after that date. If exempt, your landlord can raise rent by any amount with 90 days notice.
Can my landlord raise rent by more than 2.5%?
Yes, but only in specific circumstances. Landlords can apply to the Landlord and Tenant Board for an Above Guideline Increase using Form L5. Valid reasons include major capital expenditures, extraordinary municipal tax increases, or new security services. The maximum additional increase is 3% per year above the guideline.
What should I do if my landlord raises rent without proper notice?
If your landlord didn't provide 90 days notice or didn't use Form N1, the rent increase is invalid. You are not required to pay the higher amount. You can file a T1 application with the Landlord and Tenant Board within 12 months to dispute the illegal increase and potentially recover any overpayments.
How often can my landlord increase rent in Ontario?
Landlords can only increase rent once every 12 months. The increase must occur at least 12 months after either the start of your tenancy or your last rent increase, whichever is later. Any rent increase that happens sooner is illegal under the Residential Tenancies Act.
What is the rent increase guideline for 2026?
The Ontario rent increase guideline for 2026 has been set at 2.1%, lower than the 2025 guideline of 2.5%. This means landlords can raise rent by a maximum of 2.1% for increases taking effect in 2026. The guideline is announced by August 31st each year by the Ministry of Municipal Affairs and Housing.
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