Ontario's 2026 rent increase guideline is 2.1% — the lowest cap in four years, down from 2.5% in each of the three previous years. The guideline is set annually by the Ministry of Municipal Affairs and Housing and is based on Ontario's Consumer Price Index, a measure of how the cost of goods and services changed over a specific 12-month window. Whether you're a tenant wondering how much your rent can legally go up, or a landlord calculating what you can charge, this guide covers everything you need to know.
What the 2.1% cap means in dollar terms
Multiply your current monthly rent by 2.1% to find the maximum legal increase for 2026.
The guideline is based on the Ontario Consumer Price Index calculated monthly by Statistics Canada that reflects economic conditions over a 12-month period (June to May). With inflation cooling from its 2022–2023 peak, the 2026 rate dropped to 2.1% — the first time since 2022 that the guideline has fallen below the legal maximum of 2.5%.
Does the 2.1% guideline apply to your unit?
Coverage depends entirely on when a unit was first occupied for residential purposes — not when you moved in.
| Unit type | First occupied | Guideline applies? |
|---|---|---|
| Apartments, houses, basement suites, condos | On or before Nov 15, 2018 | Yes — 2.1% cap |
| New builds, new additions, new basement units | After Nov 15, 2018 | No — any amount |
| Vacant units (new tenancy) | Any date | No — landlord sets price |
| Social housing | Any date | Separate rules apply |
New buildings, additions to existing buildings and most new basement apartments that are first occupied after November 15, 2018 are not subject to the rent increase guideline. However, landlords of exempt units must still give 90 days' written notice and can only raise rent once every 12 months. The lease should state that the unit is exempt.
Three rules landlords must follow — every time
A landlord's failure to follow any of the three procedural rules may render the entire increase unenforceable. A tenant may continue paying their current rent and challenge the notice at the Landlord and Tenant Board.
- 1Use Form N1 — Landlords must use Form N1: Notice of Rent Increase, available from the LTB. Text messages, emails, and verbal notices are not valid for rent-controlled units. Download Form N1 at ontario.ca/ltb.
- 2Give 90 days' notice — A landlord must provide the tenant with at least 90 days' written notice before the increase's effective date. Example: for a January 1 increase, notice must be delivered by September 30.
- 3Respect the 12-month rule — Rent can only increase once every 12 months, regardless of the guideline percentage. This applies per tenancy, not per lease renewal — two increases in 12 months for the same tenant is illegal.
Above-Guideline Increases (AGI) — what they are and when they apply
In limited circumstances, landlords can apply to the LTB for permission to raise rent beyond the 2.1% cap. These are called Above-Guideline Increases.
| Valid AGI reason | Examples |
|---|---|
| Major capital expenditures | Roof replacement, new windows, plumbing overhaul — not routine maintenance |
| Extraordinary cost increases | Significant rise in municipal taxes or insurance premiums |
| New security services | Introduction of security systems or services for the complex |
The maximum increase the LTB can approve is generally 3% above the guideline — a total of up to 5.1% in 2026 — which may be spread out over up to three years. Tenants who receive an AGI notice have the right to attend the LTB hearing and challenge the application.
What tenants can do when a rent increase is illegal
- ▸Verify coverage first — Confirm whether your unit is covered by the guideline. Check your lease and ask your landlord when the building was first occupied.
- ▸Check the math — Current rent × 2.1% = the legal maximum. If the increase exceeds this and you have no AGI order, it is likely illegal.
- ▸Review the notice — Was it Form N1? Was it delivered at least 90 days before the effective date? If not, the increase may be unenforceable.
- ▸File a T1 Application — If the increase is illegal, you can apply to the Landlord and Tenant Board to challenge an improper rent increase. File within 12 months of the illegal charge.
- ▸Get free legal support — Legal clinics and tenant advocacy organizations like CLEO (Community Legal Education Ontario) provide free advice and resources for renters.
Ontario rent increase guideline — year by year
| Year | Guideline | Note |
|---|---|---|
| 2021 | 0% | COVID-19 rent freeze |
| 2022 | 1.2% | |
| 2023 | 2.5% | Hit statutory maximum |
| 2024 | 2.5% | Hit statutory maximum |
| 2025 | 2.5% | Hit statutory maximum |
| 2026 | 2.1% | Lowest in 4 years — cooling inflation |
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