Ontario Rent Increase Guidelines: A Complete Guide for Landlords

One of the most common questions Ontario landlords ask is: "How much can I raise the rent?" The answer depends on when the unit was first occupied and whether you're applying within or above the annual guideline.

Annual Guideline Increases

Each year, the Ministry of Municipal Affairs and Housing publishes a rent increase guideline based on the Ontario Consumer Price Index. For 2026, the guideline is 2.1%. This is the maximum percentage that rent can be increased for most residential tenancies without applying to the LTB.

To increase rent at the guideline rate:

1. Serve an N1 (Notice of Rent Increase) to each tenant
2. Give at least 90 days' notice before the effective date
3. Ensure at least 12 months have passed since the last increase or tenancy start

Above-Guideline Increases (AGIs)

Landlords can apply to the LTB for above-guideline increases when they've incurred extraordinary capital expenditures, increased security costs, or municipal property tax increases above the guideline. AGIs require a formal L5 application filed directly with the LTB.

Rent-Controlled vs. Exempt Units

Units first occupied for residential purposes after November 15, 2018 are exempt from the annual guideline. Landlords of exempt units can increase rent by any amount, provided they give 90 days' written notice.

History of Ontario Rent Increase Guidelines

Year	Guideline
2026	2.1%
2025	2.5%
2024	2.5%
2023	2.5%
2022	1.2%
2021	0% (COVID rent freeze)

Step-by-Step: Serving an N1 Notice

1. Confirm eligibility: At least 12 months must have passed since the tenancy began or the last rent increase took effect
2. Calculate the new rent: Apply the guideline percentage (2.1% for 2026) to the current lawful rent
3. Complete the N1 form: Generate N1 forms instantly with Shanker Kana
4. Serve the notice: Give at least 90 days' notice via hand delivery, mail (add 5 days), or sliding under the door
5. Keep records: Document when and how you served the notice

Common Mistakes Landlords Make with Rent Increases

• Serving too late: Missing the 90-day window delays the increase by a full month
• Wrong form: Using an N1 when you need an L5 AGI application can invalidate your increase
• Incorrect calculation: Applying the guideline to the wrong base rent
• Not tracking LMR interest: When rent increases, the LMR deposit must also be adjusted. Use the LMR Interest Calculator

Shanker Kana automates rent increase tracking, N1 generation, and LMR interest calculations. Start your free trial and streamline compliance.