Published: June 25, 2026

2026 Ontario Rent Increase Guideline: What Every Ontario Landlord and Tenant Should Know

The Ontario Government has officially set the 2026 Rent Increase Guideline at 2.1%, the maximum annual increase most landlords can charge tenants living in rent-controlled units.

For both landlords and tenants, understanding how the guideline works is essential. Charging too much—or increasing rent incorrectly—can result in an illegal rent increase that may be challenged.

Whether you own a condominium, duplex, basement apartment, or investment property, this guide explains everything you need to know.

What is the Ontario Rent Increase Guideline?

The Rent Increase Guideline limits the amount most residential rents can increase each year under Ontario's Residential Tenancies Act.

For 2026, the guideline is:

2.1%

The guideline is calculated using Ontario's Consumer Price Index (CPI) and is capped at 2.5%.

Example Rent Increase Calculator

Current Monthly RentMaximum 2026 IncreaseNew Monthly Rent$1,500$31.50$1,531.50$2,000$42.00$2,042.00$2,500$52.50$2,552.50$3,000$63.00$3,063.00$3,500$73.50$3,573.50

Which Rentals Are Covered?

The guideline generally applies to residential rental units first occupied for residential purposes before November 15, 2018.

This includes many:

Toronto condos
Apartment buildings
Basement apartments
Townhouses
Detached homes
Duplexes

Which Rentals Are Exempt?

Some rental units are exempt from rent control, including those first occupied after November 15, 2018.

Examples include:

Newly built condominiums
Newly constructed rental homes
Newly finished basement apartments
New purpose-built rental units

For exempt units, landlords are generally not limited by the annual guideline, although proper notice requirements still apply.

The 90-Day Notice Requirement

Even if increasing rent by only 2.1%, landlords must still provide:

✅ At least 90 days written notice

The correct notice is usually the N1 Notice of Rent Increase (or N2 for certain exempt units).

A rent increase also cannot occur:

More than once every 12 months
Before the tenant has occupied the unit for 12 months

When Does the Increase Take Effect?

Example:

Current Rent:
$2,400

Desired Increase Date:
October 1, 2026

Notice must be served by:

July 3, 2026 (or earlier)

Missing the deadline means waiting until the next eligible increase date.

Why Some Landlords Are Choosing Not to Increase Rent

Although landlords can legally increase rent by 2.1%, many property owners are choosing not to.

Current market conditions include:

Increased rental inventory
Longer vacancy periods
More tenant incentives
Greater competition between landlords

Many experienced landlords find that retaining an excellent tenant is more valuable than collecting a modest increase while risking a vacancy.

Should You Raise the Rent?

Consider increasing if:

The tenant consistently pays on time.
Operating costs have increased significantly.
The rent is below comparable market levels.
You plan to keep the property long term.

You may consider waiting if:

The tenant is exceptional.
Market rents have softened.
Comparable units are sitting vacant.
Avoiding turnover is your priority.

Common Mistakes Landlords Make

Increasing Rent Too Early

Rent can only increase once every 12 months.

Giving Less Than 90 Days Notice

Incorrect notice can invalidate the increase.

Using the Wrong Form

Using the wrong notice form can delay the process.

Assuming Every Unit Is Rent Controlled

Many newer units are exempt.

Verbal Notice

Rent increases should always be documented properly.

Frequently Asked Questions

Can I increase rent more than 2.1%?

Only if the rental unit is exempt from rent control or an Above Guideline Increase (AGI) has been approved where applicable.

Does a Month-to-Month Tenant Still Receive Protection?

Yes.

Month-to-month tenants remain protected by Ontario's rent increase rules.

Can a Tenant Refuse the Increase?

If the increase complies with Ontario law, tenants are generally required to pay the new legal rent once it takes effect.

What Happens if I Miss the Deadline?

You must wait until the next eligible date and provide a new 90-day notice.

Ontario Rental Market Outlook for 2026

While rental demand remains strong due to population growth and immigration, many markets—including Toronto—have experienced higher inventory levels and increased competition among landlords.

For the remainder of 2026, many industry observers expect:

Stable vacancy rates with modest seasonal fluctuations.
Slower rent growth than experienced during 2022–2024.
Greater emphasis on tenant retention.
Increased incentives such as free parking, reduced deposits (where permitted), or move-in bonuses in competitive areas.

For landlords, maintaining a high-quality rental property and fostering good tenant relationships may provide better long-term returns than pursuing the maximum allowable annual increase.

Final Thoughts

The 2026 Ontario Rent Increase Guideline of 2.1% provides landlords with a predictable framework while helping tenants manage housing costs.

Whether you decide to implement the increase should depend not only on the guideline itself but also on your property's market position, tenant quality, and long-term investment goals.

For many landlords, a reliable long-term tenant is worth considerably more than a small annual increase.

Need Help Managing Your Rental Property?

At RentingToronto.com, we help landlords with:

Tenant screening
Professional property management
Rent increase notices
Lease agreements
Property marketing
Rental market advice
Tenant placement services