Ontario Rent Increase Guideline 2025

Q: Who Does the Guideline Apply To?

The rent increase guideline applies to rent-controlled units — specifically, residential units that were first occupied for residential purposes on or before November 15, 2018 .

2.5%

Ontario Rent Increase Guideline for 2025

The Ontario government sets a rent increase guideline each year under the Residential Tenancies Act. For 2025, the guideline is 2.5%. This is the maximum a landlord can raise rent for existing tenants in rent-controlled units without applying to the Landlord and Tenant Board (LTB).

What Is the Rent Increase Guideline?

The guideline is calculated using the Ontario Consumer Price Index (CPI). It is announced each year by the Ministry of Municipal Affairs and Housing and applies to rent increases that take effect between January 1 and December 31 of that year.

Year	Ontario Rent Increase Guideline
2020	2.2%
2021	0% (frozen due to COVID-19)
2022	1.2%
2023	2.5%
2024	2.5%
2025	2.5%

Who Does the Guideline Apply To?

The rent increase guideline applies to rent-controlled units — specifically, residential units that were first occupied for residential purposes on or before November 15, 2018.

Exempt from Rent Control (No Guideline Applies)

Residential units first occupied for residential purposes after November 15, 2018
New purpose-built rental buildings occupied after that date
New condos, townhouses, or houses first rented after that date

If your unit is exempt from rent control, you can increase rent to any amount when a new tenant moves in, and you can increase an existing tenant's rent by any amount with proper 90-day notice. Verify the unit's first occupancy date carefully.

How to Give a Rent Increase Notice

To raise rent, landlords must:

Use Form N1 (Notice of Rent Increase) from the LTB website
Give the tenant at least 90 days written notice before the increase takes effect
Ensure the increase takes effect on the first day of a rental period (e.g., the first of the month)
Not increase rent more than once in any 12-month period

Count carefully: if rent is due on the 1st of the month, a notice served on March 1 gives notice for March, April, and May — making the earliest increase effective date June 1.

What Happens If You Give Less Than 90 Days Notice?

If you give less than 90 days notice, the increase is still valid but the effective date is pushed out. The 90-day clock restarts from the date notice was actually received. A tenant does not have to pay an improperly noticed increase on the originally stated date.

Above-Guideline Increases (AGI)

Landlords can apply to the LTB for a rent increase above 2.5% in 2025 under limited circumstances:

Extraordinary increases in municipal taxes or charges
Significant capital expenditures (major improvements to the building)
Increased costs for security services

To apply, file an L5 Application with the LTB. The process requires documentation of the costs and is subject to LTB review. The increase, if approved, is applied over a multi-year period and may include a 3% cap on capital expenditure increases per year.

Rent Reduction Requirements

Just as landlords can increase rent, they can be required to reduce rent in certain circumstances:

If municipal taxes decrease by more than 2.49%, the landlord may be required to reduce rent
If an AGI was granted and the underlying costs are no longer being incurred

Example: 2025 Rent Increase Calculation

Current monthly rent: $1,800
2025 guideline: 2.5%
Maximum increase: $1,800 × 2.5% = $45
New maximum rent: $1,845/month

Notice must be given at least 90 days before the increase takes effect using Form N1.

Common Landlord Mistakes

Increasing rent more than once in 12 months
Giving less than 90 days notice
Using an informal note instead of Form N1
Increasing rent above the guideline without LTB approval
Applying a rent increase to a unit exempt from rent control incorrectly (or not knowing it is exempt)

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Conclusion

The 2025 Ontario rent increase guideline is 2.5%. Use Form N1, give 90 days notice, and apply only once per 12-month period. If your unit was first occupied after November 15, 2018, rent control does not apply and you have more flexibility — but the proper notice requirement still applies. When in doubt, consult the LTB website or a legal professional specializing in landlord-tenant law.