Ontario Rent Increase Guideline 2026: 2.1%

What does 2.1% actually mean for your rent?

Let's skip the theory and look at real numbers. Say your tenant pays $2,400 per month. With the 2026 guideline, here is the math:

Use our free rent increase calculator

When can you increase rent in Ontario?

The Residential Tenancies Act has timing rules that trip up a lot of landlords. You generally cannot increase rent whenever you feel like it.

Here is the typical sequence:

1. Wait 12 months. Rent can usually only go up once every 12 months. That clock starts from when the tenant moved in, or from the last rent increase, whichever is later.
2. Give 90 days notice. You need to serve written notice at least 90 days before the increase takes effect. Not 89 days. Not "about three months." Ninety full days.
3. Use the right form. For guideline increases, the N1 form is typically what you need. The LTB updates forms periodically, so grab the current version from Tribunals Ontario.
4. Pick the right effective date. The increase usually needs to start on the first day of a rental period. For most tenancies, that means the first of the month.

Calculate your N1 effective date

The N1 form: basics for guideline increases

The N1 (Notice of Rent Increase) is the standard form for increasing rent by the guideline amount or less. You fill in the tenant's name, the address, current rent, new rent, and the effective date. Sign it, date it, and serve it properly.

"Properly" matters. Hand delivery works. Mail works if you account for the extra days. Email can work if the tenant has agreed to receive notices electronically. Whatever method you use, keep proof. A Certificate of Service is your friend here.

When the guideline may NOT apply

Not every rental unit in Ontario is subject to rent control. The big one: units that were first occupied for residential purposes after November 15, 2018 are generally exempt from the rent increase guideline.

What does "first occupied" mean? If no one ever lived in that unit before November 15, 2018, and the first tenant moved in after that date, the guideline probably does not cap your increases. This includes:

• New construction completed after November 15, 2018
• Basement apartments or secondary suites created after that date
• Commercial spaces converted to residential after that date

If your unit is exempt, you can technically increase rent by any amount. But you still need to give 90 days notice. And if you are not 100% sure whether your unit qualifies, it is worth checking with the LTB or getting legal advice. Getting this wrong can lead to tenant disputes and refund orders.

Above Guideline Increases (AGI)

Need to increase by more than 2.1%? For rent-controlled units, you will need to apply to the Landlord and Tenant Board for an Above Guideline Increase. AGIs are typically approved for:

• Significant capital expenditures (new roof, elevator repairs, etc.)
• Extraordinary increases in municipal taxes or utilities
• Operating cost increases related to security services

The AGI process involves an application, supporting documentation, and often a hearing. It is not a quick process. Most small landlords stick with the guideline unless they have made major capital improvements.

Common mistakes that get landlords in trouble

After seeing hundreds of rent increase situations, these are the errors that come up again and again:

What to keep for your records

Good documentation protects you if a dispute ever lands at the LTB. For rent increases, keep:

• A copy of every N1 notice you have served, with the date you served it
• Certificate of Service noting how and when you delivered the notice
• Rent ledger showing payment history, current rent, and when increases took effect
• Lease agreement (ideally the Ontario Standard Lease) with the original rent amount
• Any tenant acknowledgments or responses to the notice

If you ever need to file an L1 for arrears or defend against a tenant application, this paper trail makes your life much easier.