New Ontario Rent Increase Rules For 2027 Every Tenant Must Know

Ontario’s new rent increase guideline for 2027 is officially set at 1.9%, the lowest cap the province has published in the last 5 years.

The Ontario Ministry of Municipal Affairs and Housing confirmed the figure under the Residential Tenancies Act, 2006, and it applies to every eligible rent increase that takes effect between January 1 and December 31, 2027.

That 1.9% ceiling is down from the 2.1% guideline that governed 2026 increases and continues the decline from the 2.5% cap that was in effect for three consecutive years from 2023 through 2025.

This article covers exactly what the 1.9% means in real dollars, which units are covered and which are not, the legal notice and timing rules every landlord must follow, above-guideline increases, and what to do if you receive an increase you believe is illegal.

What the 1.9% Guideline Means in Actual Dollars

A percentage feels abstract until you see it on a bank statement.

The table below shows the maximum lawful monthly increase for five common rent levels under the 2027 guideline, calculated by multiplying the current lawful rent by 1.9%.

Current Monthly Rent	Maximum Increase (1.9%)	New Monthly Rent
$1,400	$26.60	$1,426.60
$1,700	$32.30	$1,732.30
$2,000	$38.00	$2,038.00
$2,500	$47.50	$2,547.50
$3,000	$57.00	$3,057.00

A tenant paying $2,000 per month at the 2027 maximum would spend $456 more over 12 months, roughly $48 less than the same tenant would have absorbed under the 2026 cap of 2.1%.

For tenants closer to the $3,000 range, the annual cost still adds up to $684, a meaningful hit to household budgets even at a lower guideline rate.

When Landlords Can Legally Increase Rent

For ordinary landlord-initiated rent increases, Ontario law imposes two key timing rules.

The 12-month rule. A landlord cannot raise rent unless a full 12 months have passed since either the date the current tenancy began or the date the last lawful increase took effect, whichever is later.
The 90-day written notice requirement. The landlord must deliver written notice of the increase at least 90 days before the new amount takes effect, using the correct Landlord and Tenant Board form for the unit’s status.

A handwritten letter, a text message, a verbal conversation, or any notice that does not use the correct LTB form is not legally valid under the Residential Tenancies Act.

If a landlord fails to provide proper notice or does not respect the 90-day window, you are not obligated to pay the higher amount, even if the increase itself falls within the 1.9% guideline.

For a rent increase taking effect on January 1, 2027, October 3, 2026 was the latest date to provide a notice that is served that day and still satisfy the 90-day requirement across Ontario.

That deadline has already passed for landlords planning a January 1 increase.

The Major Exemption for Units First Occupied After November 15, 2018

This is the single most important rule that Ontario tenants must understand before evaluating any rent increase.

Ontario’s rent-control exemption generally applies to new buildings and additions that were first occupied for residential purposes after November 15, 2018.

It can also apply to many new self-contained units created after that date in detached, semi-detached, or row houses, including basement apartments, when the conditions in the Residential Tenancies Act are met.

For those units in existing houses, the exemption can apply where the space was previously unfinished or where the owner lived in another residential unit in the house when the new unit was first occupied.

If the exemption applies, the landlord can legally raise your rent by any amount of 5%, 10%, or more as long as they provide 90 days’ written notice on the correct LTB form (Form N2, not Form N1) and wait 12 months between increases.

If the exemption is disputed, the landlord bears the burden of proving that the unit qualifies.

How to confirm whether your unit is covered:

Check whether your lease contains an additional term stating that the unit is exempt from the rent increase guideline.

Ask your landlord to confirm in writing and keep a copy of the response.

Search your building’s address through your municipal permit database, review occupancy permits or building records, or contact the Landlord and Tenant Board to ask whether your unit falls under the guideline.

If you are unsure about your unit’s status, the safest step is to verify before accepting an increase, because the difference between a 1.9% cap and an unlimited increase can amount to hundreds of additional dollars per month for tenants living in newer Ontario buildings.

Proper LTB Forms for Rent Increases

Ontario’s Landlord and Tenant Board publishes specific forms that landlords must use for different types of rent increases, and the forms are available at tribunalsontario.ca/ltb/forms.

Form N1 is used for most rent-controlled units, including ordinary guideline increases and notices involving an above-guideline increase application.
Form N2 is the Notice of Rent Increase (Unit Partially Exempt) and is used where the unit is exempt from the rules limiting the amount of a rent increase, including qualifying post-November 15, 2018 units.
Form L5 is the application a landlord files with the Landlord and Tenant Board when seeking an above-guideline increase for eligible capital expenditures, security-service costs, or extraordinary municipal-tax increases.
Form N10 is a voluntary agreement between a landlord and tenant to increase rent above the guideline in exchange for a specified capital expenditure or a new or additional service.

If your landlord delivers a rent increase notice that does not use the proper LTB form, you can dispute the increase at the Landlord and Tenant Board within 12 months of the date you were first charged the higher amount, and eligible tenants may qualify for free assistance through Legal Aid Ontario-funded community legal clinics.

When Can Landlord Enforce Above-Guideline Rent Increases

The 1.9% cap is not an absolute ceiling in every situation.

Ontario landlords can apply to the Landlord and Tenant Board on Form L5 for an above-guideline increase under the Residential Tenancies Act if they have experienced extraordinary increases in municipal taxes, capital expenditures for major repairs or renovations, or security service costs.

If a landlord has applied for an above-guideline increase, the Form N1 can state that the requested increase is above the guideline and that an LTB decision is still pending.

Until the Board issues its order, a tenant may choose to pay either the amount stated in the notice or the current rent plus the annual guideline increase.

If the AGI is later approved, the order can apply retroactively to the first effective date, meaning a tenant who paid only the guideline amount may owe the approved difference.

Tenants have the legal right to attend the hearing, present evidence, and challenge the landlord’s claims, and eligible tenants may qualify for free assistance through Legal Aid Ontario-funded community legal clinics.

For eligible capital expenditures and security-service costs, the additional increase is generally limited to three percentage points in a 12-month period for tenants paying Ontario rent.

With a 1.9% guideline, that component could therefore bring an increase to 4.9%, although extraordinary municipal-tax increases are calculated separately and can affect the final amount approved by the LTB.

How the 1.9% Guideline Affects Your Last-Month Rent Deposit

The 2027 guideline rate does not apply only to monthly rent.

Under the Residential Tenancies Act, landlords must pay annual interest on a tenant’s last-month rent deposit at the guideline rate in effect when the interest is due.

For 2027, that means the interest rate on your deposit is 1.9%, and the landlord can apply that interest toward topping up the deposit after a lawful rent increase.

If your landlord has not been crediting interest to your deposit each year, they cannot simply demand the difference; when your rent goes up, the interest owed reduces the amount you would need to top up.

What Tenants Can Do If a Rent Increase Appears Illegal

Not every rent increase notice is valid, and Ontario tenants have clear legal pathways for responding.

Check the form. The notice itself must use the proper LTB form generally Form N1 for rent-controlled units or Form N2 for qualifying exempt units. A plain-text letter, text message, verbal statement, or email that does not contain the proper form is not a substitute. The form itself may be served by email where email service is permitted.
Check the math. Calculate 1.9% of your current lawful rent and compare it to the amount your landlord is requesting for any increase taking effect in 2027.
Check the timing. Count the days between the date you received the notice and the proposed effective date it must be at least 90 days, and at least 12 months must have passed since your last increase or the start of the tenancy.
Check your unit’s status. Confirm whether your unit is exempt from the guideline to know whether the 1.9% cap or an unlimited increase is legally permitted.

If anything does not add up, you can file a T1 application with the Landlord and Tenant Board within 12 months after the increased amount was first charged.

Eligible tenants may qualify for free assistance through Legal Aid Ontario-funded community legal clinics, which operate across the province and regularly handle rent-increase disputes.

Do not ignore an improper increase: under Ontario law, a rent increase can be deemed lawful if its legality is not challenged within one year after the increased amount was first charged.

How the 2027 Guideline Compares With Recent Years

The 1.9% rate for 2027 continues a downward trend from the post-pandemic peak, and it stands well below the 2.5% cap that Ontario applied for three consecutive years from 2023 through 2025.

Year	Guideline (%)
2027	1.9
2026	2.1
2025	2.5
2024	2.5
2023	2.5
2022	1.2
2021	0 (COVID-19 rent freeze)
2020	2.2
2019	1.8

The guideline is calculated each year using the Ontario Consumer Price Index, which measures inflation over a 12-month period from June to May, and the rate is capped at a maximum of 2.5% regardless of how high inflation runs in a given year.

That 2.5% cap was the binding constraint from 2023 to 2025, when the raw CPI-based calculation would have produced a higher number, so the decline to 2.1% in 2026 and now 1.9% in 2027 reflects genuinely cooling inflation pressures across the Ontario economy.

For a tenant whose landlord applied the full guideline increase every year after the 2021 rent freeze, the compounded increase from 2022 through 2027 would be approximately 13.4%.

A unit renting for $1,500 before those increases would reach roughly $1,701 after the 2027 increase, before any approved above-guideline increases.

What Ontario Tenants Should Do Right Now

Knowing the rules is only useful if you act on them before a deadline passes, and several critical windows are already open for Ontario renters heading into 2027.

Verify your unit’s rent-control status. Contact your landlord in writing or check municipal building permit and occupancy permit records to confirm whether your unit qualifies for the post-November 15, 2018 exemption.
Review any notice you receive. Confirm the notice uses the correct LTB form (N1 for covered units, N2 for exempt units), that it provides a full 90 days before the effective date, and that the proposed increase does not exceed 1.9% unless an above-guideline increase is being sought or has been approved, or a valid Form N10 agreement applies.
Keep records. Store copies of your lease, every rent payment receipt, and all correspondence with your landlord in a dedicated folder you can access quickly.
Respond in writing. Whether you accept or dispute an increase, confirm your position in writing so you have a record.
Seek free legal help early. If you believe your increase is unlawful, contact a community legal clinic or the LTB well before the 12-month filing deadline expires, because under Ontario law a rent increase can be deemed lawful if its legality is not challenged within one year after the increased amount was first charged.

Your rights under the Residential Tenancies Act protect you only if you exercise them, and the difference between a valid and an invalid increase often comes down to whether a tenant checked the form, counted the days, and responded before the window closed.

The 1.9% guideline for 2027 gives Ontario tenants slightly more breathing room than any year since 2022, but it does not change the underlying structure of the province’s rental market.

Units qualifying for the post-November 15, 2018 exemption remain entirely outside the cap, new tenants signing leases at market rates face no ceiling at all, and above-guideline increases can push effective rates well beyond the published number for tenants in older buildings.

As of October 2026, the post-November 15, 2018 exemption remains in force, while the annual guideline for covered units continues to be calculated using Ontario CPI and is capped at 2.5%.

Know the guideline, check your notice, and act before the deadline.

Frequently Asked Questions (FAQs)

Can my landlord raise rent by more than 1.9% in 2027 without LTB approval?

Not necessaril, a landlord can raise rent above 1.9% without an LTB order if the unit qualifies for the post-November 15, 2018 exemption, in which case the guideline does not apply. A landlord and tenant can also voluntarily enter into a Form N10 agreement for a specified capital expenditure or a new or additional service. An N10 increase cannot exceed the guideline plus three percentage points, and the tenant can cancel the agreement in writing within five days of signing. Otherwise, a landlord seeking an above-guideline increase for a rent-controlled unit generally must apply to the LTB using Form L5.

Does the 1.9% cap apply differently in Toronto than in other parts of Ontario?

The 1.9% guideline applies uniformly across the entire province under the Residential Tenancies Act, regardless of municipality. There is no separate Toronto rent cap or regional variation. The same rules about the November 15, 2018 exemption, 90-day notice, and the 12-month waiting period between increases apply to tenants in Ottawa, Hamilton, London, Mississauga, and every other Ontario city.

What happens if I already paid a rent increase that turned out to be above the legal guideline?

You can file a T1 application, Tenant Application for a Rebate of Money the Landlord Owes, with the Landlord and Tenant Board within 12 months after the increased amount was first charged. If the LTB finds the increase was unlawful, it can order your landlord to refund the overpayment. Eligible tenants may qualify for free help with preparing and filing the T1 application through Legal Aid Ontario-funded community legal clinics.

Can a landlord raise rent between fixed-term leases or only during month-to-month tenancies?

In Ontario, a landlord can increase rent on covered units once every 12 months regardless of whether the tenancy is fixed-term or month-to-month, provided they deliver proper notice at least 90 days before the effective date. When a fixed-term lease expires and the tenant stays, the tenancy automatically continues on a month-to-month basis under the Residential Tenancies Act, and the landlord cannot require the tenant to sign a new lease at a higher rent beyond the guideline for units covered by rent control.

How do I find out whether my building was first occupied before or after November 15, 2018?

Check whether your lease contains an additional term stating that the unit is exempt from the rent increase guideline. You can also ask the landlord for the basis of the exemption and review building permits, occupancy permits, or municipal records. The Landlord and Tenant Board can be reached at 1-888-332-3234 for guidance on verifying your unit’s status. If the exemption is disputed before the LTB, the landlord bears the burden of proving that the unit qualifies.

Fact-Checked: All rent increase guideline figures, notice requirements, form references, and deposit interest rules cited in this article were verified against the official Ontario residential rent increases page published by the Ministry of Municipal Affairs and Housing, the Residential Tenancies Act, 2006, and current Landlord and Tenant Board guidance and forms, including N1, N2, N10, L5, and T1.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Tenancy rules vary by individual circumstances. Tenants facing a dispute should contact the Landlord and Tenant Board or a licensed legal professional for guidance.

Sidak Singh Dhanoa

I am a born Canadian citizen and growing daily with my content on INC – Immigration News Canada, developing into an empathetic person and knowing the other side of the story. Born in Toronto, exploring Canada from coast to coast, embracing the nomadic lifestyle.