How Ontario Landlords Legally Raise Rent: Guideline, N1/N2 Notices, and Exemptions Explained

The Rent Increase Guideline is the maximum percentage by which a landlord can raise rent for most existing tenants in a given calendar year, without applying to the Landlord and Tenant Board (LTB). It is set annually by the Ontario government under the Residential Tenancies Act, 2006 (RTA).

According to the Government of Ontario (ontario.ca), recent guidelines are:

• 2026: 2.1%
• 2025: 2.5%
• 2024: 2.5%
• 2023: 2.5%

The guideline applies to most private residential rentals in Ontario — houses, semi-detached homes, basement apartments, condos, care homes, mobile homes, and land-lease communities. A key point: the guideline applies to the tenancy, not just the unit. It limits how much rent can increase for an existing tenant, not how much a landlord can charge a brand-new tenant (with one important exception, explained below).

Step 1 — Determine Whether the Unit Is Exempt

Not every rental unit in Ontario is subject to the guideline. The most significant exemption, introduced by the Ontario government in 2018, covers units first occupied for residential purposes after November 15, 2018.

According to the LTB (tribunalsontario.ca), this exemption covers:

• New apartment buildings and condos first occupied after November 15, 2018
• New additions to existing buildings first occupied after that date
• New self-contained units (e.g. new basement apartments) added to houses that had no more than two units as of November 15, 2018, provided the new unit was created and first occupied after that date

For exempt units, there is no cap on the amount of a rent increase. However, landlords of exempt units must still comply with the 90-day notice rule and the 12-month rule — only the guideline ceiling is removed.

If in doubt about whether your unit qualifies, check the original building permit or first occupancy date, or contact the LTB directly.

Step 2 — Use the Correct LTB Notice Form

Verbal or informal written notice of a rent increase is not valid in Ontario. Landlords must use an official LTB form, delivered in a prescribed manner.

• Form N1 — Notice of Rent Increase: Used for units subject to the guideline. The increase stated on the N1 cannot exceed the guideline for that year (e.g. 2.1% for a 2026 increase). Both the new rent and the percentage increase must be filled in correctly.
• Form N2 — Notice of Rent Increase (Unit Partially Exempt): Used for units exempt from the guideline — primarily those first occupied after November 15, 2018. There is no percentage ceiling on an N2 increase, but the same notice timing rules apply.

Both forms are available free from the LTB at tribunalsontario.ca. Errors on the form — wrong dates, wrong percentage, wrong tenant name — can invalidate the notice.

Step 3 — Comply with the 90-Day and 12-Month Rules

Two procedural rules apply to every rent increase in Ontario, regardless of whether the unit is guideline-exempt:

90-day advance notice: The written notice must be received by the tenant at least 90 days before the rent increase takes effect. The RTA specifies valid delivery methods: personal delivery to the tenant, leaving it in the tenant’s mailbox, or sending by registered mail. Slipping it under the door or sending by email is generally not sufficient unless the tenant has explicitly consented in writing to electronic service.

12-month rule: Rent can only be increased once in any 12-month period. The clock starts from the last rent increase, or from the date the tenant first moved in if there has been no prior increase. A landlord cannot give multiple notices to stack increases within a year.

If either rule is violated, the rent increase is legally void. A tenant who paid the higher amount can apply to the LTB for a rent abatement within 12 months of the first overcharge.

Step 4 — Above-Guideline Increases (AGI): The L5 Application

For guideline-covered units, a landlord who needs to increase rent beyond the annual guideline must apply to the LTB using Form L5 — Application for a Rent Increase Above the Guideline.

According to the LTB (tribunalsontario.ca), an AGI may be justified on three grounds:

• Capital expenditures: Extraordinary renovations, repairs, or replacements whose benefit extends at least five years (e.g. new roof, elevator modernization, major plumbing overhaul). The work must be completed within an 18-month window ending 90 days before the first requested increase date. Capital expenditure increases are capped at 3% above the guideline per year; if justified costs exceed that, the increase can be phased over three years.
• Extraordinary operating cost increases that exceed what the guideline is designed to absorb
• Significant municipal tax increases that are outside normal variation

An AGI is not a shortcut — it requires a full LTB hearing, supporting documentation (receipts, invoices, tax notices), and can take several months to resolve. If approved, the LTB issues an order specifying the permitted increase amount and effective date.

• Give rent increase notice verbally or by informal text/email without LTB-prescribed delivery
• Provide fewer than 90 days’ notice before the increase date
• Raise rent more than once in any 12-month period
• Exceed the guideline on a covered unit without LTB approval (AGI order)
• Charge a new tenant more than the last lawful rent (for guideline-covered units where a prior tenancy existed in the last 12 months — rent control on unit continuity)
• Retaliate against a tenant for exercising their rights (e.g. asking for repairs) by issuing a rent increase

• Confirm whether the unit is covered by the guideline or exempt (N1 vs N2)
• Calculate the correct percentage and new rent amount
• Count back 90 days from the intended effective date to find the latest valid delivery date
• Verify the last rent increase date — has it been at least 12 months?
• Deliver the notice using an RTA-approved method and keep proof of delivery
• Keep a copy of the signed notice for your records

Q: What is the Ontario rent increase guideline for 2026?

According to the Government of Ontario (ontario.ca), the 2026 rent increase guideline is 2.1%. This is the maximum a landlord can raise rent for most tenants in a guideline-covered unit in a calendar year without LTB approval. The 2025 guideline was 2.5%.

Q: Do landlords of post-November 2018 units have to give notice to raise rent?

Yes. Units first occupied for residential purposes after November 15, 2018 are exempt from the rent increase guideline (no cap on the amount), but landlords must still give at least 90 days’ written notice using Form N2 from the LTB, and can only raise rent once every 12 months. The exemption removes the ceiling, not the notice requirements.

Q: What happens if a landlord gives less than 90 days' notice?

The rent increase is legally void. A tenant who paid the increased amount under an invalid notice may apply to the LTB (using Form T1) within 12 months of the first overcharge to recover the difference. The LTB can order a rent abatement and may also order the landlord to correct the notice and reissue it properly.

Q: When can a landlord apply for an above-guideline increase (AGI)?

A landlord of a guideline-covered unit can apply for an AGI by filing Form L5 with the LTB when costs justify an increase above the annual guideline. The three grounds are: significant capital expenditures (capped at 3% above guideline per year), extraordinary operating cost increases, or significant municipal property tax increases. Each ground requires supporting documentation and a hearing.

Q: Can a landlord raise rent to market rate between tenancies?

For units exempt from rent control (first occupied after November 15, 2018), yes — a landlord can set any rent for a new tenant. For guideline-covered units, the rules are more nuanced: there is generally no restriction on the rent charged to a brand-new tenant after a vacancy, but landlords should confirm the current rules directly with the LTB, as rent control on unit continuity can apply in some circumstances.