In most rent-controlled Ontario units, your landlord can raise the rent by no more than 2.1% for increases taking effect in 2026, and by no more than 1.9% for increases taking effect in 2027. Those caps are set each year by the Province under the Residential Tenancies Act. But the guideline does not apply to every unit, and a landlord must follow strict timing and notice rules. Here are the basics every Toronto tenant should know.

At a glance

• Maximum one increase every 12 months.
• At least 90 days’ written notice, on the proper Landlord and Tenant Board (LTB) form (usually the N1).
• Units first occupied for residential purposes after November 15, 2018 are generally exempt from the cap.
• The 2.5% figure is also the legal ceiling for the guideline itself.

How the guideline is calculated

The guideline is based on the Ontario Consumer Price Index, averaged over the 12 months ending in May of the previous year, and is capped at 2.5% even when inflation is higher. That is why 2023 to 2025 were all at or near 2.5%, while easing inflation brought 2026 down to 2.1% and 2027 to 1.9%. The figure that applies is the guideline for the year in which your increase starts, not the year the notice was given.

Example

If you pay $2,200 a month and your increase takes effect March 1, 2027, the maximum allowed increase is 1.9%: $41.80, for a new rent of $2,241.80. If the increase had started in December 2026, the 2.1% guideline would apply instead ($46.20).

The 12-month and 90-day rules

• 12 months: rent can be increased only once every 12 months, counted from the last increase or from the day the tenancy began.
• 90 days’ notice: the landlord must give written notice at least 90 days before the increase takes effect, using the proper LTB form (the N1 for most units, or the N2 for units exempt from the guideline).

If the notice is late or not on the right form, the increase is void. You can still pay it while you check, but you are allowed to dispute an improper increase at the LTB within one year of first being charged it.

Who is not covered by the guideline

According to the Government of Ontario, the guideline does not apply to:

• Units in new buildings, additions and most new basement apartments first occupied for residential purposes after November 15, 2018. In these units, rent can still rise only once every 12 months with 90 days’ notice, but there is no cap on the amount.
• Community (social) housing units, which follow their own rent rules.
• Long-term care homes (in care homes, only the rent portion is capped).
• Commercial properties.

Before you sign a lease in a newer condo, ask when the unit was first occupied. Many Toronto condos completed after 2018, from Liberty Village to the Yonge and Eglinton area, fall under the exemption, which can mean large increases at renewal. Our Toronto cost of living guide shows how rent fits into a typical budget.

Vacancy decontrol: new tenants, new rent

Ontario has vacancy decontrol: when a unit becomes vacant, the landlord can set any rent for the next tenant. The guideline then applies to that new tenant’s future increases. This is why rents for a new lease can be far higher than what a long-time tenant in the same building pays.

Above-guideline increases (AGIs)

A landlord can apply to the LTB for permission to raise rent above the guideline in limited cases, such as major capital repairs, extraordinary increases in municipal taxes, or security services. Tenants receive notice of the application and can participate in the hearing. Since July 1, 2026, some AGI-related deadlines are shorter, so read any notice carefully and act quickly.

Increases you agree to

A tenant and landlord can agree to an increase above the guideline in exchange for a new service or capital work (for example, adding parking or air conditioning), using the proper LTB form. A tenant can cancel such an agreement in writing within five days of signing it.

What to do if you get an increase notice

1. Check the effective date: is it at least 12 months since your last increase?
2. Count the days: was the notice given at least 90 days before?
3. Check the percentage against the guideline for the year the increase starts.
4. Confirm whether your unit is exempt (first occupied after November 15, 2018).
5. If something is wrong, contact the LTB (416-645-8080 or toll-free 1-888-332-3234) or a community legal clinic.

Want the bigger picture of your rights? Read our guide to Ontario tenant rights and the Landlord and Tenant Board. If you are thinking about buying instead, compare costs with our mortgage payment calculator.

Rent increase guideline history

The guideline has moved with inflation, within the 2.5% legal ceiling. Recent years, according to the Government of Ontario and the Province’s annual announcements:

For tenants in older, rent-controlled buildings, the lower guidelines for 2026 and 2027 mean smaller increases than in the previous three years. Tenants in post-2018 units do not benefit, because their increases are not capped. The guideline also sets the interest rate a landlord must pay each year on a last month’s rent deposit, so it affects that payment too.

FAQ

Can my landlord raise the rent when I renew my lease?

Renewal does not reset anything. The same 12-month, 90-day and guideline rules apply; a lease ending does not allow a bigger increase.

My building was built in 2020. Is my rent capped?

Generally no, if the unit was first occupied after November 15, 2018. Your landlord still needs 90 days’ written notice and can only raise rent once every 12 months.

Is the 2027 guideline final?

Yes. The Province set it at 1.9% for increases taking effect between January 1 and December 31, 2027.

This is general information, not legal advice. For your specific situation, contact the Landlord and Tenant Board or a community legal clinic.

Last updated: November 2026