Ontario's 2026 rent-increase guideline: the 2.1% cap explained
Ontario's Ministry of Municipal Affairs and Housing announced the 2026 rent-increase guideline at 2.1% — down from 2.5% in 2025 and the lowest cap set in four years. The guideline is not optional for landlords of covered units, and getting the notice process wrong can void an increase entirely.
How the guideline is calculated
Each year the province calculates the guideline using Ontario's Consumer Price Index for a specified 12-month window. For the 2026 guideline, that window ran from June 2023 to May 2024. The resulting figure is the maximum a landlord can raise rent for most private residential tenants without seeking approval from the Landlord and Tenant Board.
Which units the guideline covers
The 2.1% cap applies to most private residential rental units that were first occupied for residential purposes on or before November 15, 2018. Per Ontario's Residential Tenancies Act, covered units include most apartments, houses, and basement suites of that vintage, regardless of when the current tenant moved in.
Which units are exempt
Buildings and additions first occupied after November 15, 2018 are not subject to the guideline. Landlords of those units can raise rent by any amount with proper written notice. The same applies to most new basement apartments and newly added units that meet the post-2018 threshold. This carve-out was introduced to incentivize new rental supply and remains in place for 2026.
- Units first occupied on or before November 15, 2018: 2.1% cap applies.
- Units first occupied after November 15, 2018: no guideline cap; any increase with proper notice.
- Care homes and certain social housing: different rules apply under the RTA.
How to serve a compliant N1 notice
To raise rent on a covered unit, a landlord must use the LTB's N1 form (Notice of Rent Increase). The increase cannot take effect until at least 90 days after the tenant receives the notice, and landlords can only raise rent once every 12 months. Serving the notice even one day short of the 90-day window means the increase date must be pushed out.
- Use the current version of the LTB's N1 form.
- Deliver with at least 90 days' written notice before the intended effective date.
- Do not exceed 2.1% for covered units without an Above Guideline Increase application.
- Only one rent increase per 12-month period is permitted.
Above guideline increases
Landlords who have faced extraordinary operating cost increases — for example, capital repairs or utility cost spikes — can apply to the LTB for an Above Guideline Increase (AGI). AGI applications require evidence and go through a formal hearing process; approval is not guaranteed. Given current LTB processing times (more on that below), AGI applications filed today may resolve well into 2027.
Universal lesson: notice timelines are unforgiving
Canadian or American, the lesson is the same: lease administration software that tracks rent-increase dates and automates notice generation pays for itself the first time it catches a missed 90-day window. One void increase on a covered unit in Ontario means waiting another 12 months.
- How Kera tracks rent-increase dates and N1 notices
- Automate rent collection and payment tracking
- More industry analysis
What is Ontario's rent-increase guideline for 2026?
2.1%, as announced by Ontario's Ministry of Municipal Affairs and Housing. It is the maximum rent increase a landlord can apply to most covered units without LTB approval.
Does the 2.1% guideline apply to new builds?
No. Units first occupied for residential purposes after November 15, 2018 are exempt from the guideline. Landlords of those units can raise rent by any amount with proper written notice.
How much notice must I give before raising rent?
At least 90 days' written notice on the LTB's N1 form. The increase cannot take effect until that 90-day period has passed, and you can only increase rent once in any 12-month period.
Can I raise rent above 2.1% if my costs have increased?
Yes, through an Above Guideline Increase (AGI) application to the LTB. You must provide documented evidence, and approval goes through a formal hearing. Given current LTB processing times, plan for this to take many months.
What happens if I serve the N1 with fewer than 90 days' notice?
The notice is invalid for the intended date. You must serve a new notice with a corrected effective date that respects the 90-day minimum, which delays the increase.
Keep rent increases compliant, automatically
Kera tracks guideline deadlines, flags exempt units, and seeds the N1 reminder before the 90-day window closes — so a missed date doesn't cost you a full year.
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