Rent Increase Rules
Ontario's Residential Tenancies Act has strict rules about when and how much you can increase rent. OntarioLandlord validates all rent increases against these rules.
Key Rules Summary
| Rule | Requirement |
|---|---|
| Notice Period | Minimum 90 days before increase takes effect |
| Frequency | Maximum once every 12 months |
| Amount | Cannot exceed annual guideline (unless Above Guideline Increase approved) |
| Effective Date | Must be on the first day of a rental period |
Annual Rent Increase Guideline
The Ontario government sets an annual guideline for rent increases:
| Year | Guideline Percentage |
|---|---|
| 2026 | 2.5% |
| 2025 | 2.5% |
| 2024 | 2.5% |
| 2023 | 2.5% |
| 2022 | 1.2% |
| 2021 | 0% (COVID freeze) |
The current guideline is 2.5%. This is the maximum you can increase rent without an Above Guideline Increase (AGI) application.
Calculating Rent Increase
Example
Current rent: $2,000/month
Guideline: 2.5%
Maximum increase: $2,000 x 2.5% = $50/month
New rent: $2,050/month
Using OntarioLandlord
When generating an N1 notice:
- Enter the proposed new rent
- System calculates the percentage increase
- Validates against the guideline
- Blocks if above guideline (unless AGI noted)
12-Month Rule
You can only increase rent once every 12 months.
| Scenario | Can You Increase? |
|---|---|
| No increase in 18 months | Yes |
| Increased 11 months ago | No - wait 1 more month |
| Increased exactly 12 months ago | Yes |
| New tenancy, no prior increases | Yes (after 12 months from start) |
How We Track This
OntarioLandlord records the lastRentIncreaseDate on each lease. When generating an N1:
- System checks months since last increase
- Calculates earliest valid effective date
- Prevents invalid notices
90-Day Notice Requirement
The N1 notice must be served at least 90 days before the increase takes effect.
Example Timeline
| Event | Date |
|---|---|
| Serve N1 notice | January 15, 2026 |
| 90 days later | April 15, 2026 |
| Earliest effective date | May 1, 2026 (first of rental period) |
Exemptions
Some units are exempt from rent increase guidelines:
| Exemption | Description |
|---|---|
| New buildings | First occupied after November 15, 2018 |
| Social housing | Different rules apply |
| Commercial units | RTA doesn't apply |
If your unit is exempt, you can increase rent by any amount with proper notice. OntarioLandlord still validates notice timing but not the amount.
Above Guideline Increase (AGI)
If you need to increase above the guideline, you must apply to the LTB:
- File an AGI application
- LTB reviews eligible costs (capital expenditures, taxes, utilities)
- If approved, you can increase above guideline
OntarioLandlord helps track capital expenditures that may qualify for AGI.
Validations in OntarioLandlord
When generating an N1, we check:
- At least 12 months since last increase
- At least 90 days notice
- Effective date is first of rental period
- Increase percentage within guideline
- Current guideline year applied
If any check fails, you'll see an error explaining why and what to fix.
Common Questions
What if my tenant has never had an increase?
You can increase rent 12 months after the lease started, with 90 days notice.
Can I increase rent for a new tenant?
You can set any rent amount for a new tenant. Guideline rules only apply to increases during a tenancy.
What if I forgot to increase rent for several years?
You can only make one increase per 12-month period. You cannot "catch up" with multiple increases.
My building is newer - do guidelines apply?
Buildings first occupied after November 15, 2018 are exempt from guidelines. You can increase by any amount with proper notice.