What Is the Ontario Rent Increase Guideline for 2027?
A Landlord guide to rent increases
Published: October 18, 2026
2027 Rent Increase Guideline | Ontario Landlord Info
As we look ahead to 2027, Ontario landlords should be reviewing their rental income, operating expenses and current market conditions before deciding whether to increase their tenants’ rent.
The Ontario government has announced a 2027 rent increase guideline of 1.9% for most rent-controlled residential properties. While landlords may be entitled to increase rent within the provincial guideline, the decision deserves more consideration than simply applying the maximum allowable percentage.
If you have a reliable tenant who pays on time, takes care of your property and communicates well, is increasing the rent by a small amount worth the risk of losing a good tenant? With rental prices having softened in some Ontario markets, comparing your property with similar available rentals is more important than ever.
Here is what Ontario landlords should know about the 2027 rent increase guideline and how to make a well-informed decision.
What Is the Ontario Rent Increase Guideline for 2027?
Ontario’s rent increase guideline for 2027 is 1.9%, down from 2.1% in 2026.
For most residential rental properties covered by Ontario’s rent control rules, this is the maximum annual increase permitted without approval from the Landlord and Tenant Board (LTB) or another applicable statutory exception.
The guideline applies to most apartments, condominiums, houses, semi-detached homes and basement apartments covered by the Residential Tenancies Act, 2006.
How much can you increase the rent in 2027?
Here are some examples of what a 1.9% increase would mean for common monthly rental amounts:
EXAMPLE:
Current Rent - Increase - New Rent
$2,300 - $43.70 - $2,343.70
These examples assume the property is rent-controlled and the increase is otherwise lawful.
Although the additional income can help offset rising expenses, landlords should consider the potential cost of losing a good tenant before automatically applying the full guideline.
When Can a Landlord Increase Rent in Ontario?
For most rent-controlled properties, landlords must follow several important rules.
1. At least 12 months must have passed
At least 12 months must have passed since the tenancy began or since the last rent increase took effect.
2. Provide at least 90 days’ written notice
Landlords must serve the tenant with the proper Landlord and Tenant Board notice of rent increase, generally Form N1 for a rent-controlled tenancy, at least 90 days before the increase takes effect.
3. Use the correct percentage
For a rent-controlled property, the 2027 guideline is 1.9%. An increase above the guideline generally requires LTB approval or another specific legal exception.
4. Check whether the property is exempt from rent control
Many residential units first occupied for residential purposes after November 15, 2018, are exempt from the guideline, subject to statutory conditions and exceptions. This can include qualifying new buildings and certain newly created rental units.
Landlords should verify the property's specific circumstances before assuming either that rent control applies or that an exemption is available.
For official information, visit the Ontario government's Residential Rent Increases page.
Should You Increase the Rent if You Have an Excellent Tenant?
This is where landlords should take a step back and consider the bigger picture.
A tenant who pays rent on time, keeps the property clean, reports maintenance concerns promptly and respects the property is a valuable asset. Finding another tenant can involve advertising, showings, application screening, reference checks, cleaning, repairs and the possibility of lost rental income.
A modest rent increase may make financial sense on paper, but the decision should also account for the cost and uncertainty of replacing a good tenant.
Consider the real cost of losing a tenant
Imagine that you currently collect $2,500 per month and are considering the full 1.9% increase.
Your rent would rise by $47.50 per month, generating an additional $570 over 12 months.
Now consider what could happen if your tenant decides to move.
You may face:
Several weeks or longer without rental income.
Advertising, showing and tenant-screening costs.
Cleaning, repairs or other turnover expenses.
The risk of securing a new tenant at a lower rent than you currently receive.
The uncertainty of whether the next tenant will be equally reliable.
Even a relatively short vacancy can outweigh the income gained from a small annual increase.
For example, one month of vacancy at $2,500 costs $2,500 in lost rent. That is equivalent to more than four years of the proposed $570 annual increase, before accounting for other turnover costs.
This does not mean landlords should never increase rent. It means the financial benefit should be weighed against the risk of losing a tenant who has already demonstrated that they are worth keeping.
Compare Your Property With the Current Rental Market
Before sending a rent increase notice, take time to investigate what similar properties are actually being advertised for in your area.
Rental markets change. A property that commanded a premium two years ago may face more competition today, particularly if several comparable units are available or landlords are offering incentives to attract tenants.
If comparable properties are now being advertised at lower rents, increasing your existing tenant's rent could make your property less competitive and encourage them to explore other options.
What should you compare?
When reviewing comparable rentals, look at properties with similar:
Location and neighbourhood.
Number of bedrooms and bathrooms.
Square footage and overall layout.
Building age and condition.
Parking and locker availability.
In-suite laundry and other amenities.
Utilities included in the rent.
Outdoor space, views and natural light.
Building facilities and overall maintenance.
Also consider whether competing landlords are offering incentives, such as a free month of rent, reduced parking fees or other concessions. The advertised rent does not always tell the whole story.
Whenever possible, compare your property against several genuinely similar listings rather than relying on one unusually high or low asking price.
Remember that asking rents are not necessarily the final rents achieved. Use available market evidence, recent leasing experience and professional advice where possible.
What if your current tenant is already paying market rent?
If your tenant is paying a fair market rent and comparable units are sitting vacant or being offered at lower prices, you may have little practical reason to rush into an increase.
Maintaining the current rent for another year may help you retain a reliable tenant and avoid turnover costs.
On the other hand, if your property is significantly under market and your expenses have increased, a lawful rent increase may still be appropriate. The key is to make the decision based on the numbers rather than habit.
Calculate the Financial Benefit Before Making a Decision
A useful way to assess the proposed increase is to calculate how much additional annual income it generates and compare that amount with the potential cost of turnover.
For example, a $2,500 monthly rent produces an additional $570 annually following a 1.9% increase.
If the tenant leaves and the property sits vacant for one month, the lost rent alone would be $2,500. You would need more than four years of the additional $570 annual income to recover that vacancy loss, assuming no further increases or other costs.
This calculation is illustrative, not a prediction that a tenant will leave. Its purpose is to highlight why a small rent increase should be considered alongside the financial value of tenant retention.
Landlords should also account for property taxes, insurance, condominium fees, mortgage costs, utilities and maintenance when evaluating the property's overall performance.
A Practical Checklist for Landlords Before Increasing Rent
Before deciding on a 2027 rent increase, ask yourself the following questions:
Has the tenant consistently paid rent on time?
Does the tenant maintain the property and report problems appropriately?
Has the tenant been cooperative and respectful?
Is the current rent competitive with comparable properties?
Have rental prices in the neighbourhood increased, remained stable or softened?
How much additional annual income will the increase generate?
What would one month of vacancy cost me?
Could turnover, repairs and advertising costs outweigh the additional income?
Would retaining the tenant at the current rent be the better financial decision?
Have I confirmed the applicable rent control rules and notice requirements?
Your answers will help you determine whether increasing the rent is the right decision for your particular property.
The Bottom Line: The Maximum Increase Is Not Always the Best Decision
The 2027 Ontario rent increase guideline provides landlords with a framework for adjusting rent on most rent-controlled properties. However, being legally permitted to increase rent does not necessarily mean that doing so is the best financial move.
A reliable tenant offers stability, predictable income and fewer management headaches. In a competitive rental market, those benefits can be worth considerably more than a modest annual increase.
Before serving a rent increase notice, compare your property with similar rentals, review your expenses and calculate the potential cost of losing your tenant.
At Renting Toronto, we believe landlords should make rental decisions based on the full financial picture—not simply the maximum permitted increase. Sometimes increasing the rent is the right move. In other situations, retaining an excellent tenant at the current rate may deliver better long-term results.
A little research today can help you make a more informed decision for the year ahead.
Disclaimer: This article provides general information about Ontario residential tenancies and is not legal or financial advice. Rent control exemptions, permitted increases and notice requirements depend on the circumstances of each tenancy. Consult the Ontario government or a qualified professional if you are uncertain about your obligations.