Rent Increases in Ontario: What Every Landlord and Tenant Must Know
Ontario's Residential Tenancies Act, 2006 tightly regulates how and when a landlord can raise rent. Violating the rules exposes landlords to LTB orders and forces rent rollbacks — while tenants who don't know the rules may pay more than the law allows.
The Annual Rent Increase Guideline
Each year, the Ontario government publishes a rent increase guideline — the maximum percentage a landlord can increase rent without applying to the LTB. The guideline is tied to the Ontario Consumer Price Index (CPI).
| Year | Guideline % |
|---|---|
| 2022 | 1.2% |
| 2023 | 2.5% |
| 2024 | 2.5% |
| 2025 | 2.5% |
Units first occupied for residential purposes on or after November 15, 2018 are exempt from rent control — landlords of these units can raise rent by any amount with proper notice.
Proper Notice Requirements
- Landlord must give at least 90 days written notice using the official Form N1
- Only one rent increase per 12-month period is allowed
- Notice must state the new rent amount and the effective date
- Notice served by mail requires 5 additional days (totalling 95 days)
Above-Guideline Increase (AGI) Applications
A landlord can apply to the LTB for an above-guideline increase (Form L5) on three grounds:
- Extraordinary operating cost increases — e.g., utility costs increased by more than the guideline
- Capital expenditures — major repairs or replacements (roof, HVAC, windows) that are not routine maintenance
- Security services — new or increased security costs
Tenants receive notice of the AGI application and have the right to participate in the LTB hearing to challenge the landlord's claimed expenses. Capital expenditure increases are typically limited to 3% above the guideline in any one year.
What If the Landlord Raises Rent Illegally?
Tenants can file a T1 application (Tenant's Application for a Rebate of Money the Landlord Owes) at the LTB. Remedies include:
- Order to pay back all illegally collected rent
- Reduction of rent to the last lawful rent amount
- LTB order fixing the lawful rent going forward
Calculating the Last Lawful Rent
If a landlord missed proper notice or exceeded the guideline, the tenant's obligation is to pay only the last lawfully charged rent. Any amount paid above that — even if paid for years — can be recovered. The T1 lookback period is one year from the application date.
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