If you’ve ever opened a rent increase notice and wondered whether the number on it is actually legal, you’re not alone. Ontario caps how much landlords can raise rent each year, and that cap for 2025 sits at 2.5% — a figure that applies to roughly 1.4 million apartments built before November 2018. Below, you’ll find exactly how that limit works, which units it covers, and what tools Ontario provides to calculate your own increase.

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2025 Guideline Limit: 2.5% · Capped Since: 2016 · Notice Period: 90 days · Applies After: 12 months no increase · Ontario Policy Source: ontario.ca

Quick snapshot

1Confirmed facts
2What’s unclear
3Timeline signal
4What’s next
  • Landlords planning increases for 2026 must issue Form N1 by early September 2025 (Tenon10 (Calculator Resource))
  • 2027 guideline reportedly hovers near 2.5% pending CPI data (Tenon10 (Calculator Resource))

The table below summarizes the core parameters governing Ontario rent increases in 2025.

Key fact Value
2025 Maximum Increase 2.5%
2026 Guideline 2.1%
Policy Cap History 2.5% since 2016
Notice Period 90 days
Minimum Interval 12 months between increases
AGI Maximum Per Year 3% above guideline (5.5% for 2025)
Affected Units ~1.4 million (pre-November 2018)
Notice Form N1
AGI Application Form N10

What is the rent increase guideline for 2025 in Ontario?

Ontario’s rent increase guideline for 2025 is set at 2.5%, which represents the maximum a landlord can raise rent for most residential units without obtaining approval from the Landlord and Tenant Board. The rate has held steady at 2.5% for three consecutive years (2023, 2024, and 2025), though the 2026 guideline has already dropped to 2.1% based on the most recent Consumer Price Index data from Statistics Canada.

Guideline percentage

The 2.5% cap applies to all private residential units that were first occupied on or before November 15, 2018 — approximately 1.4 million apartments across the province, according to PayProp. The guideline is calculated using the Ontario Consumer Price Index, then capped at 2.5% to balance inflation protection for landlords against affordability for tenants. Units first occupied after November 15, 2018, are exempt from rent control altogether, meaning landlords of newer buildings can raise rents by any amount between tenancies.

When it applies

A rent increase under the guideline can take effect only after a tenant has lived in the unit for at least 12 months without a prior increase, and the landlord must deliver written notice at least 90 days before the new rate kicks in. The increase takes effect on the anniversary of the tenancy start date or the date of the last increase. These rules are uniform across Ontario — there are no municipal variations within the province.

The upshot

Ontario’s 2.5% cap has remained unchanged since 2023, but the 2026 guideline has already slipped to 2.1%. Landlords who locked in a 2.5% increase for 2025 should plan ahead: those planning increases effective in 2026 have a narrower window, and the math works differently on a lower base.

How much can a landlord raise rent in Ontario?

For most rent-controlled units, the answer is straightforward: 2.5% maximum on the current rent, once every 12 months, with 90 days’ written notice delivered via Form N1. Beyond that baseline, landlords have two additional pathways — above-guideline increases for capital investments, and the complete freedom to set new rent between tenancies for exempt units.

Guideline calculation example

The math is simple. Take your current monthly rent, multiply by 2.5% (or 0.025), and that gives you the increase amount. The Ontario government’s own example shows $1,000 rent increasing to $1,025 on June 1 of the applicable year. For a $2,000-per-month unit, that’s $50 extra — bringing the new rent to $2,050. Notably, landlords cannot round up the new figure; the calculation must use the exact percentage.

Above guideline process

Landlords seeking to increase rent above the 2.5% guideline must apply to the Landlord and Tenant Board using Form N10 and demonstrate eligible reasons — typically major renovations, capital improvements, or added services. The maximum above-guideline increase is capped at 3% per year above the guideline, which means for 2025 the absolute ceiling is 5.5% (2.5% + 3%). Over a three-year period, the cap sits at 9% above guideline. Tenants receive notice of these applications and can object before the Board.

“The rent increase guideline for 2026 is 2.1%. The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board.”

— Government of Ontario (Official Guideline Source)

Why this matters

For a tenant in a $1,500-per-month unit, a 2.5% increase means $37.50 more per month — $450 over the year. Over a decade with compound annual increases, that difference grows substantially. Knowing the cap lets tenants spot illegal increases before they appear on a notice.

What is the maximum rent increase for 2026?

Ontario has already published the 2026 rent increase guideline at 2.1%, based on the Consumer Price Index data from June 2024 through May 2025. The official Government of Ontario page confirms this figure and includes a worked example: $1,000 rent on June 1, 2025, increases to $1,021 on June 1, 2026. The 2.1% figure falls below the 2.5% cap, meaning inflation data actually produced a lower guideline than the statutory ceiling.

Expected guideline

The 2026 guideline marks the second consecutive year the actual CPI calculation has come in below the 2.5% ceiling. This signals that the province’s hard cap is functioning as designed — protecting tenants from the full bite of inflation when price indices spike. For landlords, the implication is modest: even with the cap at 2.5%, the actual allowable increase next year will be lower.

Current discussions

The 2027 guideline is reportedly estimated at approximately 2.5%, according to calculator resources that track historical trends. This remains a projection rather than an official figure; the actual 2027 rate will be confirmed once the Ministry of Municipal Affairs and Housing reviews the relevant CPI data next year.

Bottom line: Tenants who see a rent increase notice above 2.5% without an LTB approval order can treat that notice as void and continue paying their current rent — the Board will side with them if the landlord challenges non-payment.

Can tenants refuse a rent increase in Ontario?

Tenants cannot technically “refuse” a lawful rent increase that follows the guideline, because the increase is legally permissible once the 90-day notice arrives with the correct amount and timing. What tenants can do is verify the math, challenge any increase above guideline without an LTB order, and file a dispute if the notice contains procedural errors.

Tenant rights

Tenants in rent-controlled units have the right to refuse to pay an increase that exceeds the guideline, provided the landlord has not obtained LTB approval for an above-guideline increase. If a tenant receives a notice stating a 4% increase for 2025 without accompanying LTB paperwork, that notice is invalid. The tenant can continue paying the existing lawful rent and, if the landlord files with the Board, participate in the hearing to contest the increase.

Legal notice requirements

A valid rent increase notice must be in writing, delivered at least 90 days before the increase takes effect, state the current rent, the new rent, and the effective date, and use the approved Form N1. The notice can be delivered in person, by mail, or posted to the door if the tenant cannot be reached. Electronic delivery is not permitted unless the tenant has agreed in writing.

“Ontario’s annual rent increase guideline will remain at 2.5% for 2025. The cap only applies to properties built and first occupied before November 15, 2018.”

— PayProp (Property Management Expert)

How to use rent increase calculator and forms for Ontario?

Ontario provides several official and third-party tools to calculate rent increases, along with mandatory forms for serving notice. Using these correctly is critical — a notice that lacks proper form or timing can be declared void by the Landlord and Tenant Board.

Official tools

The Ontario government’s own page at ontario.ca offers the benchmark calculation and examples, though it does not provide an interactive calculator. Third-party calculators at ontariolandlord.ca, Tenon10, and landlord.net all confirm the 2.5% rate for 2025 and the 2.1% rate for 2026. These tools work by having the landlord or tenant input the current monthly rent and select the applicable year, then the tool applies the correct percentage and displays the new rent amount.

Form requirements

Landlords must use Form N1 for a standard rent increase notice. The form is available from the Landlord and Tenant Board’s website and must be filled out with the current rent, proposed new rent, and the date the increase takes effect — which must fall on the anniversary of the tenancy or the last increase date, and no earlier than 12 months from either. For above-guideline increases, Form N10 is required and must be submitted to the LTB, not just handed to the tenant.

What to watch

Ontario tenants: if your landlord hands you a notice with an increase above 2.5%, ask whether the LTB has issued an order approving the above-guideline amount. Without that order, the notice is void — and you can continue paying your current rent.

Rent Increase Timeline

The timeline below traces the key policy inflection points that shaped Ontario’s current rent control regime.

Date Event
June 17, 2016 Ontario publishes 2.5% guideline policy page; cap mechanism established
After November 15, 2018 New units first occupied from this date become exempt from rent control
January 1, 2025 2025 guideline (2.5%) takes effect for increases effective on or after this date
June 2025 Ontario confirms 2026 guideline at 2.1% based on CPI data
January 1, 2026 2026 guideline (2.1%) takes effect; 2025 rate expires

Ontario’s rent control regime has remained structurally stable since 2016, when the cap mechanism was formally embedded in the Residential Tenancies Act. The 2.5% ceiling has served as both a floor and a ceiling — triggering when inflation exceeds the cap, and lying dormant when CPI falls below it, as it does for 2026.

What Is Confirmed vs. Unconfirmed

Confirmed

  • 2025 guideline is exactly 2.5% across Ontario for pre-November 2018 units
  • 90 days’ notice in writing required; 12-month gap between increases
  • Form N1 for standard notices; Form N10 for above-guideline applications
  • LTB approval required for any increase above 2.5%
  • 2026 guideline officially set at 2.1%

Unconfirmed

  • 2027 guideline estimate (~2.5%) — not yet published by the Ministry
  • Number of above-guideline increase applications approved by LTB annually
  • Exact count of exempt vs. controlled units updated in real time

The confirmed facts rest on solid ground: multiple tier-1 and tier-2 sources align on the 2.5% rate, the 90-day notice requirement, and the November 2018 exemption cutoff. The main area of genuine uncertainty is the 2027 projection, which carries medium confidence and should be treated as directional rather than authoritative until the Ministry publishes the official figure.

Related reading: Canada carbon rebate 2025

Additional sources

fastevictionservice.com, ontariolandlord.ca, landlord.net, payprop.com, myrentalguide.ca

Ontario’s 2.5% rent increase guideline shapes local markets, where London’s 2025 rental trends reveal a five percent decline in average rents amid new construction surges.

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Frequently asked questions

What happens with illegal rent increases in Ontario?

If a landlord increases rent above the guideline without LTB approval, the increase is void. Tenants who already paid the illegal amount can apply to the LTB for a rebate. The Board can order the landlord to repay any excess rent collected.

How does Ontario rent guideline compare across Canada?

Ontario’s 2.5% cap for 2025 is relatively restrictive compared to provinces without hard caps. British Columbia ties increases to inflation with no separate ceiling, while Alberta allows increases of up to 40% for eligible properties. Quebec applies moderate annual limits. Ontario’s cap is most comparable to Manitoba’s approach.

When can rent increases take effect in 2025?

Any time throughout 2025, provided 12 months have passed since the last increase (or the tenancy start date) and the landlord delivers notice at least 90 days in advance. For a January 1, 2025 effective date, notice should have been sent by early October 2024.

What if rent was increased in 2024?

If a landlord applied the 2.5% increase in 2024, the next earliest date for a 2025 increase is the one-year anniversary of that 2024 increase date — not January 1, 2025. Each tenant’s anniversary date is individual and depends on the last increase date or tenancy commencement.

Are there exceptions to the 2.5% guideline?

Yes. Units first occupied after November 15, 2018, are completely exempt from the guideline. Above-guideline increases (up to an additional 3% per year) require LTB approval for eligible capital expenses. Community housing, long-term care homes, and transitional housing operate under separate rules.

How to dispute a rent increase?

Tenants can file an application with the Landlord and Tenant Board to dispute a rent increase they believe is unlawful. The filing fee is modest, and the Board will schedule a hearing where both parties present evidence. Tenants can also seek help from community legal clinics before filing.

What is rent regulation in BC vs Ontario?

British Columbia allows annual rent increases tied to the provincial inflation rate with no separate cap, meaning increases can track CPI directly. Ontario caps the increase at a maximum of 2.5% regardless of how high CPI rises — a ceiling that has directly benefited tenants during the high-inflation years of 2022 and 2023.

Ontario’s rent cap has delivered predictability for tenants through three straight years of 2.5% increases, but the 2026 drop to 2.1% signals the formula is working as designed — when inflation cools, the guideline follows. For landlords counting on steady increases to cover costs, the path forward requires either accepting the lower 2026 rate or pursuing an above-guideline application with documented capital work. For tenants, the message is simpler: if your landlord quotes a number above 2.5% for 2025, demand the LTB order before you pay a cent extra.