2025–2026 Ontario Rent Increase Guidelines

The 2026 Ontario rent increase guideline is 2.5%. That's the headline most condo owners know. The detail most don't know is which buildings are exempt, when the 2.5% is the wrong cap to use, and what makes an N1 notice valid versus invalid.

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1. What the guideline is

Ontario's rent increase guideline is the maximum percentage by which a landlord can raise rent on a non-exempt unit each calendar year. It's set annually by the Ministry of Municipal Affairs and Housing and reflects the Ontario Consumer Price Index, capped under the Residential Tenancies Act at 2.5%.

For 2026, the guideline is 2.5%. For 2025, it was 2.5% as well. Year-over-year continuity in the cap reflects the legislative ceiling — the actual CPI input has been higher in some recent years, but the statutory cap holds the guideline at 2.5% maximum.

2. When the guideline applies

The guideline applies to most residential rental units in Ontario, including condominium units that are rented out. To raise rent under the guideline, three conditions must all be met:

• The notice must be in writing on the proper form (Form N1)
• The notice must be given at least 90 days before the increase takes effect
• At least 12 months must have passed since the start of the tenancy or the last rent increase

3. Buildings exempt from the guideline

Units in buildings first occupied on or after November 15, 2018 are exempt from the rent increase guideline. For these units, you can raise rent by any amount — but the 90-day N1 notice rule and the 12-month timing rule still apply.

This exemption matters enormously in downtown Toronto, where a meaningful share of the post-2018 condo inventory is exempt. If you're not certain about your building's first-occupancy date, check with your condo corporation or a paralegal before pricing a renewal.

4. The N1 form mechanics

Form N1 is the official notice for guideline rent increases. The form is short, but the rules around its service are unforgiving. Common mistakes that void an N1:

• Notice given fewer than 90 days before the increase date
• Increase percentage exceeds the guideline (without an AGI order)
• Notice served by a method not permitted by the RTA
• Math errors on the new rent amount

5. When the guideline isn’t enough

In specific situations — large capital expenses, extraordinary utility increases, security upgrades — a landlord can apply for an Above-Guideline Increase ('AGI') through the Landlord and Tenant Board. AGI applications require detailed documentation, can take months to adjudicate, and aren't worth filing for trivial expenses.

AGI strategy is one of the situations where in-house paralegal expertise materially changes outcomes. The application must be filed correctly, the supporting documentation must be airtight, and the hearing testimony must align with the paperwork.

6. Strategic considerations beyond compliance

Compliance is the floor. The strategic question is whether to take any increase at all in a given year. Holding rent flat for a strong tenant who's likely to stay another two or three years often beats a 2.5% bump that triggers vacancy and a re-leasing cycle.

We model this for every CentreKey owner at renewal time — the actual cash-flow math, not just the headline rent number. Sometimes the right answer is the full 2.5%. Sometimes it's zero. The data tells us which.

Key Takeaways

- 2026 Ontario rent increase guideline: 2.5%
- Buildings first occupied on or after November 15, 2018 are exempt
- Notice must be on Form N1, in writing, at least 90 days before the increase
- At least 12 months must pass between increases
- Above-Guideline Increases (AGI) are possible for major capital expenses — but require LTB application