Ontario Rent Increase Guidelines 2026 & 2027: What to Expect

Understanding Ontario's Annual Rent Increase Guideline

For tenants and landlords in Ontario, the annual rent increase guideline is a critical piece of information that governs how much rent can legally be raised for most residential properties. This guideline is set by the provincial government to balance the economic conditions affecting landlords with the need for predictable housing costs for tenants. It is calculated using the Ontario Consumer Price Index, which measures inflation (Source: Ontario: Residential rent increases). This article outlines the official guidelines for 2026 and 2027, the rules that must be followed, and the exceptions that may apply.

The Official Rent Increase Guidelines for 2026 and 2027

The Government of Ontario has published the rent increase guidelines for upcoming years. The guideline that applies depends on the calendar year in which the rent increase takes effect.

• The rent increase guideline for 2026 is 2.1%.
• The rent increase guideline for 2027 is 1.9%.

For most tenants, a landlord cannot increase the rent by more than these percentages in their respective years without seeking approval from the Landlord and Tenant Board (LTB). It is important to note that to prevent significant one-time rent increases, the guideline is capped and cannot exceed 2.5% in any given year, regardless of the inflation rate (Source: Ontario: Residential rent increases).

The Process for a Legal Rent Increase

A landlord cannot arbitrarily increase the rent. They must follow a specific legal process outlined in the Residential Tenancies Act, 2006. There are two fundamental rules for a rent increase to be valid (Source: Ontario: Residential rent increases).

First, at least 12 months must have passed since the last rent increase or since the date the tenancy first began. Second, the landlord must provide the tenant with written notice of the rent increase at least 90 days before it takes effect. This notice must be given on the proper form, which is available from the Landlord and Tenant Board.

For example, if your monthly rent is $1,000 and your lease began on June 1, 2026, your landlord could increase your rent 12 months later, on June 1, 2027. Since the increase takes effect in 2027, the guideline of 1.9% applies. The calculation would be:

• 1.9% of $1,000 = $19.00
• $1,000 + $19.00 = $1,019.00

Your new monthly rent would be $1,019.00. To do this legally, your landlord would have had to provide you with the proper written notice at least 90 days before June 1, 2027 (Source: Ontario: Residential rent increases).

Which Rental Units Are Covered by the Guideline?

The annual rent increase guideline applies to most private residential rental units covered by the Residential Tenancies Act, 2006. This includes the majority of tenants in Ontario living in:

• Rented houses
• Apartments
• Basement apartments and condos
• Care homes
• Mobile homes
• Land lease communities

While social housing units are covered by the Act, they have different rules regarding rent control and increases (Source: Ontario: Residential rent increases).

Key Exemptions from the Rent Increase Guideline

Not all rental units are subject to the annual guideline. The most significant exemption applies to newer units. The guideline does not apply to (Source: Ontario: Residential rent increases):

• New buildings, additions to existing buildings, and most new basement apartments that were occupied for the first time for residential purposes after November 15, 2018.
• Rental units upon turnover of a tenancy, where the landlord and a new tenant agree on the rent amount.
• Community housing units (which have different rules).
• Long-term care homes.
• Commercial properties.

Landlords of exempt units can increase rent by any amount, provided they still give 90 days' notice and wait 12 months between increases. To prove an exemption, a landlord can include a term in the lease and keep records that demonstrate when the unit was first occupied (Source: Ontario: Residential rent increases).

Applying for an Above-Guideline Increase

In certain circumstances, a landlord can apply to the Landlord and Tenant Board for approval to raise the rent by more than the annual guideline. This might be due to extraordinary increases in municipal taxes or charges, or for significant capital expenditures (Source: Ontario: Residential rent increases). For care homes, such as retirement homes, the guideline only applies to the rent portion of the bill and does not apply to costs for services like nursing, food, or cleaning.

A Look at Past Rent Increase Guidelines

To provide context, it is helpful to see the guidelines from previous years. The guideline has fluctuated based on economic conditions. For example:

• 2025: 2.5%
• 2024: 2.5%
• 2023: 2.5%
• 2022: 1.2%

Notably, in 2021, the guideline was 0% as the Ontario government passed legislation to freeze rent at 2020 levels for most units. This rent freeze ended on December 31, 2021 (Source: Ontario: Residential rent increases).

What to Do if You Disagree with a Rent Increase

If you believe your landlord has not provided the proper 90-day notice or has increased your rent by an improper amount, you can dispute it. A tenant has up to 12 months after the amount was first charged to file an application with the Landlord and Tenant Board (Source: Ontario: Residential rent increases). For any specific questions or to resolve disputes, it is recommended to contact the LTB directly.

This article is intended for general informational purposes only and does not constitute legal or financial advice.

Sources

• Ontario: Residential rent increases

General information only, not legal, tax or financial advice. Figures are taken from the official sources above as of October 22, 2026.

Farshad Fazaeli, Salesperson · International Realty Firm, Inc., Brokerage · 647-667-5555