Ontario Rent Increase Guideline 2026: 2.1% Explained

Ontario set the 2026 rent increase guideline at 2.1%. That is the most a landlord can add to the rent on a rent-controlled unit during the 2026 calendar year without first getting approval from the Landlord and Tenant Board. It is down from 2.5% in 2025, and it is the lowest guideline in four years.

If you own a rental in Kitchener-Waterloo, Guelph, London, Hamilton or anywhere else in the province, here is what the number means, who it actually applies to, and how to raise rent without having the increase thrown out.

What the 2026 guideline actually is

The rent increase guideline is a cap. For most existing tenancies, it is the ceiling on how much you can add to the rent in a 12-month period. The province sets it each year using the Ontario Consumer Price Index, which tracks inflation. By law the guideline can never exceed 2.5%, so even in a high-inflation year it stays capped.

For 2026 the figure lands at 2.1%. A tenant paying $1,800 a month can be raised by $37.80, to $1,837.80. A tenant at $2,400 can go up $50.40, to $2,450.40. You do not have to take the full amount. You also cannot bank an unused increase from a past year and stack it on later.

Which units the 2.1% cap applies to

This is where a lot of landlords get tripped up. The 2.1% cap does not cover every rental in Ontario. The dividing line is November 15, 2018.

• First occupied on or before November 15, 2018: rent-controlled. The 2.1% guideline applies.
• First occupied after November 15, 2018: exempt from the guideline. This covers new buildings, additions, and most newer basement apartments rented for the first time after that date.

If your unit is exempt, there is no percentage cap on the increase. That is not a free-for-all, though. The notice rules and the once-a-year rule still apply, and the unit only qualifies if it was genuinely first occupied for residential purposes after the cutoff. Getting this wrong is one of the more expensive mistakes a landlord can make, so confirm the unit’s history before you assume it is exempt.

The rules that apply to every increase

Whether your unit is capped at 2.1% or exempt, three rules never change:

• Once every 12 months. You can raise the rent only once per year for the same tenant, and at least 12 months have to pass since the last increase or since the tenancy began.
• 90 days’ written notice. The tenant needs at least 90 days’ notice before the new rent starts. Three months, in writing, every single time.
• The correct form. For a guideline increase on a rent-controlled unit, use Form N1. For an exempt unit, the increase is usually served on Form N2. The form has to be filled out correctly, with the right effective date, or the increase is not valid.

These sit inside the broader set of obligations every Ontario landlord carries under the Residential Tenancies Act. An increase that skips a step does not just get delayed. It can be void, and the tenant is within their rights to keep paying the old amount.

When you can raise rent above 2.1%

The guideline is not the only path. There are three legitimate ways past 2.1% in 2026.

1. Above-guideline increase (AGI)

For rent-controlled units, you can apply to the Landlord and Tenant Board for an above-guideline increase. The usual grounds are major capital work on the building such as a new roof, windows or boiler, a large jump in municipal taxes, or added security services. When the application is based on capital expenditures or security, the Board generally will not grant more than 3% above the guideline in one year, and a bigger increase is phased in over up to three years. In practice that puts the realistic 2026 first-year ceiling around 5.1%. An AGI is a formal application, and with LTB timelines being what they are in 2026, it is not a quick process.

2. Vacancy decontrol

When a unit goes vacant and a new tenant moves in, you can set the starting rent at whatever the market will bear. Rent control attaches to the tenancy, not the unit, so the cap resets between tenants. This is the single biggest lever most small landlords have, and it is why turnover is not always the disaster it feels like.

3. A tenant-agreed increase

If you and the tenant agree to an increase above the guideline in exchange for a new service or facility, such as a parking spot, an air conditioner or a renovation, you can do it through Form N10 with the tenant’s signature. It has to be genuinely agreed, not pressured.

How this plays out in Southwestern Ontario

On a typical Guelph or Kitchener rent, 2.1% is a modest number. A $2,000 unit rises $42 a month, about $504 over the year. For most landlords that barely keeps pace with property taxes, insurance and maintenance, which have all climbed faster than 2.1% lately. That gap is exactly why vacancy decontrol and AGIs matter, and why pricing a unit correctly at the start of a tenancy is worth more than any annual bump. If you want a sanity check on what your unit should rent for, our team handles property management across Guelph and the surrounding region and prices units against live local data.

Mistakes that make a rent increase void

• Serving less than 90 days’ notice, or counting the days wrong.
• Raising rent twice inside one 12-month window.
• Using the wrong form, or leaving the effective date blank or incorrect.
• Charging more than 2.1% on a rent-controlled unit without an approved AGI.
• Assuming a unit is exempt without confirming it was first occupied after November 15, 2018.

Any one of these hands the tenant a clean reason to refuse the increase, and you generally cannot fix it after the fact. You start over, with a fresh 90-day clock.

Frequently asked questions

What is the 2026 rent increase guideline in Ontario?

It is 2.1%. That is the maximum a landlord can raise rent on a rent-controlled unit during the 2026 calendar year without approval from the Landlord and Tenant Board. It is set using the Ontario Consumer Price Index and is capped by law at 2.5%.

Does the 2.1% cap apply to my rental unit?

Only if the unit was first occupied for residential purposes on or before November 15, 2018. Units first occupied after that date, including most new builds and newer basement apartments, are exempt from the guideline, though the 90-day notice and once-a-year rules still apply.

How much notice do I have to give to raise the rent?

At least 90 days’ written notice, on the correct Landlord and Tenant Board form: Form N1 for a guideline increase, or Form N2 for an exempt unit. Rent can be raised only once every 12 months.

Can I raise rent more than 2.1% in 2026?

Yes, in specific cases: by applying to the Landlord and Tenant Board for an above-guideline increase, by setting a new market rent when a unit becomes vacant, or through a tenant-agreed increase tied to a new service or facility. A standard increase on a rent-controlled unit cannot exceed 2.1% without one of these.