Rent Increase in Ontario – What Landlords & Tenants Should Know
Rent Increase in Ontario for Homes & Condos
Most Ontario tenants are protected by rent controls that limit how much rent can increase year-over-year. The rent payable by tenants may also decrease in limited situations.
Normally, the landlord can increase the rent only once every 12 months. The landlord must use the Landlord and Tenant Board- N1 FORM and give the tenant at least 90 days’ notice before the rent increase is to take effect.
The rent can be increased by no more than the rent increase guideline unless the Landlord and Tenant Board approves a rent increase above the guideline. The guideline for each year can be found on the Landlord and Tenant Board’s website.
The rent increase guideline for 2023 is 2.5%.
However, there are some exceptions:
In some cases, landlords can apply to the Landlord and Tenant Board for approval to raise your rent by more than the rent increase guideline.
New buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018 are exempt from rent control.
Use N2 FORM in this situation.
Forms N1 and N2 can be found on the Tribunals Ontario website. Instructions to fill out these forms can also be found at the same link.
Rent Increases above the Guideline:
The landlord can apply to the Landlord and Tenant Board for approval to raise the rent by more than the rent increase guideline. Affected tenants can oppose this application at the Landlord and Tenant Board.
This kind of rent increase is called an above-guideline rent increase. The Landlord and Tenant Board can allow this kind of rent increase if:
- the landlord’s municipal taxes and charges have increased significantly
- the landlord has done major repairs or renovations
- the costs of external security services (i.e. not performed by the landlord’s employees) have increased, or external security services are being provided for the first time
The landlord and tenant can also agree to an above-guideline rent increase, if the landlord agrees to renovate or add a new service for the tenant. Certain rules apply.
The landlord must reduce the rent if:
- the municipal property tax goes down by more than 2.49 per cent
- the rent was increased above the guideline to pay for repairs or renovations and the costs have been fully paid for (this only applies to tenants who were living in the unit when the above guideline rent increase happened)
The tenant can apply to the Landlord and Tenant Board to reduce their rent if:
- municipal property taxes or charges on the rental property go down
- the landlord reduced or removed a service without reducing the rent
- the landlord did not keep a promise they made in an agreement for a rent increase above the guideline
How is the rent increase calculated?
It is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the guideline for the following year.
For more information, issues or concerns on the rent increase guideline or any landlord tenant topics, you can contact the Landlord and Tenant Board. For full guidelines on other types of residential dwellings, please visit the Ministry of Municipal Affairs and Housing website.
Got other general Landlord or Tenant Questions in your mind?
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