What is the 2026 Rent Increase Guideline (2.1%)?
Ontario has set the maximum allowable rent increase for most residential units at 2.1% for 2026—the lowest cap in four years. This guideline, announced by the Ministry of Municipal Affairs and Housing, is based on Ontario’s Consumer Price Index (CPI) average from June 2023 to May 2024.
For landlords, this means you can raise rents by up to 2.1% without additional approvals. Tenants, on the other hand, can rest assured that any increase above this limit needs a formal application to the Landlord and Tenant Board (LTB).
Who It Applies To—and Who’s Exempt
The guideline applies to most private residential rental units occupied on or before November 15, 2018, including:
- Houses, apartments, and condos
- Secondary suites and basement rentals
However, some units are exempt, including:
- Residential units first occupied after November 15, 2018
- Vacant units (landlords can set new market rents)
- Community housing, long-term care, and commercial properties
Key Rules Landlords Must Follow
If you’re planning a rent increase, here’s what the law requires:
- Only one increase every 12 months
- 90 days’ written notice using Ontario’s standard Form N1
- Effective window: increases can take effect anytime between January 1 and December 31, 2026
Quick Example
If your current rent is $2,000, the maximum increase without special approval would be $42/month, bringing the new rent to $2,042.
What If Landlords Need More? (Above-Guideline Increases)
Landlords can apply for an Above-Guideline Increase (AGI) through the LTB, but approvals are limited to specific reasons:
- Significant capital repairs or renovations
- Extraordinary increases in municipal taxes or utilities
- Increased security service costs
Applications must include documentation, and tenants have the right to dispute.
What Tenants Need to Know
Tenants should:
- Confirm that their unit falls under the guideline
- Verify the math on any rent increase notice
- Know their rights to dispute through the LTB if the increase seems incorrect
Why 2.1%? Context & Comparison
The 2.1% guideline reflects Ontario’s inflation trends, which have cooled compared to recent years. Here’s a quick look at past guidelines:
| Year | Guideline |
|---|---|
| 2023 | 2.5% |
| 2024 | 2.5% |
| 2025 | 2.5% |
| 2026 | 2.1% |
Bottom Line: Preparation & Clarity for 2026
For landlords: plan early and issue notices properly. For tenants: understand your rights and keep records of all communications.
If you’re unsure how these changes impact you—or you need help navigating Toronto’s rental market—reach out to the Toronto Livings Team. We’re here to help you stay informed and make confident decisions in 2026 and beyond.
