Ontario Rent Increase 2026: The 2.1% Guideline Explained

Ontario's rent increase guideline for 2026 is 2.1%, the maximum most landlords can raise a sitting tenant's rent for increases taking effect in 2026 without approval from the Landlord and Tenant Board (LTB). The province has already set the 2027 guideline at 1.9%. In both years, rent can only go up once every 12 months, with at least 90 days' written notice on an official form, and units first occupied after November 15, 2018 are not capped.

Below: how the guideline works, who's exempt, how to calculate your new rent, and what to do if an increase looks wrong.

Key takeaways

• 2026 guideline: 2.1%. 2027 guideline: 1.9%. By law, the guideline can never be more than 2.5%.
• The date the increase takes effect decides which guideline applies, not the date you got the notice.
• Once every 12 months, counted from your move-in date or your last increase.
• 90 days' written notice on an LTB form (usually Form N1). Verbal notice or a text message doesn't count.
• Exempt: units first occupied for residential purposes after November 15, 2018. No cap, but the 12-month and 90-day rules still apply.
• Above-guideline increases need an LTB order (Form L5), or a specific written agreement with you.

This article is general information, not legal advice. For your situation, contact the Landlord and Tenant Board or a community legal clinic through Legal Aid Ontario or Steps to Justice.

What is the rent increase guideline?

Each year, Ontario sets a maximum percentage for rent increases on most existing tenancies. It's based on the Ontario Consumer Price Index (using data from June to May) and is capped at 2.5% under the Residential Tenancies Act.

The guideline applies to your rent whether you rent a whole apartment, a basement unit or a single room, as long as the Residential Tenancies Act covers your tenancy and your unit isn't exempt.

The three rules every increase must follow

1. Once every 12 months

At least 12 months must pass since you moved in or since your last rent increase took effect. Signing a new one-year lease, or rolling into month to month after your term ends, doesn't reset the clock or allow an extra increase.

2. At least 90 days' written notice

Your landlord must give you written notice on an LTB-approved form at least 90 days before the increase takes effect:

• Form N1 for units covered by the guideline
• Form N2 when the landlord says your unit is exempt (for example, a post-2018 building)

If the notice is late or not on the right form, the increase is void. You'd keep paying your current rent until the landlord serves a proper notice and the 90 days pass.

3. No more than the guideline (for covered units)

The increase can't exceed the guideline for the year it takes effect, unless the LTB approves more or you sign a valid agreement (see below).

How to calculate your new rent

The formula is simple:

New rent = current rent × (1 + guideline)

Worked example: a one-bedroom

Maya moved into her Toronto apartment on February 1, 2025 at $2,000 a month.

• First possible increase: February 1, 2026 (12 months later).
• Notice deadline: November 3, 2025 (90 days before).
• 2026 guideline: 2.1% → $2,000 × 1.021 = $2,042.00

A year later:

• Next possible increase: February 1, 2027.
• Notice deadline: November 3, 2026.
• 2027 guideline: 1.9% → $2,042 × 1.019 = $2,080.80

Because the second increase takes effect in 2027, the 1.9% guideline applies, even though the notice is served in 2026.

Worked example: a room in a shared house

Daniel rents one room on his own lease for $1,100. An increase taking effect in 2026 can be at most $1,100 × 0.021 = $23.10, bringing his rent to $1,123.10.

If you and your roommates share one lease for the whole unit, the increase applies to the total rent, and you'll split it between you. Our guide to splitting rent fairly has formulas for unequal rooms.

Quick check: divide the increase by your current rent. If the result is above 0.021 for a 2026 increase (or 0.019 for 2027), and your unit is covered by rent control, ask questions before paying.

Is your unit exempt from the guideline?

The guideline does not apply to:

• New buildings and additions first occupied for residential purposes after November 15, 2018
• Most new basement apartments and other new units added to existing houses and completed after that date
• Some social housing, which has its own rent rules
• Rent set for a new tenant. When a unit turns over, the landlord and the new tenant can agree on any starting rent

If your landlord serves an N2 saying your unit is exempt, it's fair to ask how they know. In a dispute, the landlord has to prove the unit was first occupied after November 15, 2018. Ask when the building was first lived in, or look up its history.

Note that even exempt units are still covered by the rest of the Residential Tenancies Act: proper notice, the 12-month rule, maintenance, entry rules and evictions only through the LTB. More on that in our Ontario tenant rights guide.

When rent can go above the guideline

An LTB order (Form L5)

A landlord can apply to the LTB for an above-guideline increase (AGI) for:

• Extraordinary increases in municipal taxes and charges
• Eligible capital expenditures, such as major repairs or replacements (not routine maintenance or cosmetic work)
• New or increased costs for security services provided by outside contractors

For capital expenditures and security services, the LTB can approve no more than 3% above the guideline per year, for up to three years. Tenants get notice of the application and can take part in the hearing. Many tenants in the same building organize and respond together.

An agreement with you

In limited situations, such as when the landlord adds a new service or does a capital improvement you've asked for, you and the landlord can sign an agreement (Form N10) to increase rent above the guideline, by no more than the guideline plus 3% (so 5.1% for 2026). You're not obliged to sign, and for this type of agreement you can cancel by written notice within five calendar days of signing. The landlord can also add a new service (such as a parking spot) with a separate charge if you agree.

What if an increase doesn't follow the rules?

1. Check the dates. Has it been 12 months? Did you get 90 days' written notice?
2. Check the form. Was it an N1 or N2, not a text or email with no form?
3. Check the math. Does the percentage match the guideline for the year it takes effect?
4. Raise it in writing with your landlord and keep a copy.
5. Apply to the LTB if it isn't fixed. Don't wait too long: if you pay an improper increase and nobody challenges it within one year, it can become your lawful rent.

Remember the knock-on effect on your deposit: when rent goes up, your landlord can use the yearly interest on your last month's rent deposit to top it up to the new rent. See our rent deposit rules for how that works.

Rent increase checklist

• At least 12 months since move-in or the last increase
• Written notice received at least 90 days before the effective date
• Notice is on Form N1 (or N2 if the landlord claims an exemption)
• Increase is at or below 2.1% (2026) or 1.9% (2027), unless exempt or LTB-approved
• You know whether your building was first occupied after November 15, 2018

Plan your budget with the right people

Even a capped increase adds up, especially in Toronto, which is why many renters share. On ColivEase, AI roommate matching considers budget, habits and schedule, so the people you live with are on the same page about money. You can also rent a whole home room by room, applying per room, or apply together as a team of roommates.

Ready to find a place and people that fit your budget? Start on ColivEase.