Ontario Rent Increase Guideline 2026: The 2.1% Rule, Explained

The rent increase guideline is the maximum percentage a landlord can raise rent on most existing tenancies in a 12-month period without going to the Landlord and Tenant Board. For 2026 that figure is 2.1%. It is recalculated every year from the Ontario CPI, which is why this is an evergreen number that changes annually.

The critical point most landlords miss: the guideline does not apply to every unit. It applies to units that were first occupied for residential purposes on or before November 15, 2018. Units first occupied after that date are exempt from the guideline cap, though every other rule, including the 90-day notice and the once-per-12-months limit, still applies.

So a 2012 purpose-built rental is capped at 2.1% for 2026. A basement apartment first rented in 2020 has no percentage cap, but the landlord still cannot raise it more than once a year and still owes 90 days of written notice.

A rent increase is only legal if the tenant receives proper written notice on the official Form N1, Notice of Rent Increase, at least 90 days before the increase takes effect. A verbal heads-up, a text, or a custom letter does not satisfy the requirement.

The 90 days is a minimum, counted in full days, and does not include the day of service. If you serve by mail, the RTA adds extra days for delivery, so 90 days on the form is not 90 days from the postmark. Build a buffer in.

The N1 must state the new rent, the effective date, and the increase amount. If the unit is rent-controlled, the increase cannot exceed 2.1% for 2026unless you hold an order for an above-guideline increase.

For rent-controlled units, the guideline is not the only path. A landlord can apply to the Landlord and Tenant Board for an above-guideline increase using an L5 application. An approved AGI lets you raise rent beyond 2.1% for the year.

The two most common grounds are:

• Eligible capital expenditures. Major repairs or replacements such as a new roof, windows, or boiler. Routine maintenance does not qualify.
• Extraordinary utility cost increases. A documented, larger-than-normal jump in municipal taxes or operating costs for the building.

An AGI is evidence-heavy and the Board can phase the increase over up to three years. It is a project, not a form you mail. Plan for a hearing and keep every invoice.

Rent can only be raised once every 12 months per tenancy. If you forget to serve the N1 and the anniversary passes, you do not get to stack two increases or backdate. You simply wait, serve a fresh N1 with 90 days of notice, and the increase takes effect later than planned.

The lost rent from a skipped year does not come back. On a $2,000 unit, a missed 2.1% increase is roughly $500 of rent you never collect over the next 12 months. Multiply that across a portfolio and a forgotten calendar entry becomes a real number. This is why the serving calendar below matters.