Ontario Rent Increase 2026: The 2.1% Guideline Explained

What Is the 2026 Guideline Rate?

The Ontario rent increase guideline for 2026 is 2.1%. This figure comes from the change in Ontario's Consumer Price Index (CPI) over the 12 months ending May 31, 2025, and was published by the Ministry of Municipal Affairs and Housing. It falls below the statutory 2.5% ceiling cap under Section 120(2) of the Residential Tenancies Act, so the full CPI-tracked figure applies this year.

For context, the guideline was 2.5% in both 2024 and 2025 — years when inflation pushed the CPI figure above the statutory ceiling. At 2.1%, 2026 is the first year since 2023 that the cap hasn't been triggered.

Which Units Does the 2.1% Guideline Cover?

The guideline applies to any rental unit first occupied for residential purposes on or before November 15, 2018. That includes most standard apartments, condominiums, townhouses, and older basement suites across Ontario.

Units first occupied after that date are exempt from the percentage cap under RTA Section 6.1 — they still require 90 days' notice on the prescribed LTB form, but the landlord is not limited to 2.1%. If you're unsure which category your property falls into, the key question is whether anyone lived in the unit as a residence before November 16, 2018.

How to Calculate the New Monthly Rent

Multiply the current lawful rent by the guideline percentage:

• $1,500 rent → $1,500 × 1.021 = $1,531.50 (increase of $31.50/month)
• $2,000 rent → $2,000 × 1.021 = $2,042.00 (increase of $42.00/month)
• $2,400 rent → $2,400 × 1.021 = $2,450.40 (increase of $50.40/month)
• $3,000 rent → $3,000 × 1.021 = $3,063.00 (increase of $63.00/month)

Round to the nearest cent. The percentage applies only to the lawful base rent — not to separate charges for parking or storage severed under RTA Section 123.

One detail landlords regularly overlook: the guideline rate is determined by the effective date of the increase, not the date you sign or serve the notice. If you're serving a notice in late 2026 for an effective date in January 2027, the 2027 rate of 1.9% applies — not the 2026 rate.

The 12-Month Frequency Rule

Under RTA Section 119, you cannot make a standard rent increase until at least 12 full calendar months have passed since either the tenancy started or the last lawful increase took effect. This clock runs from effective dates, not from when you signed or served anything. Section 36.1 separately exempts a qualifying electricity-cost increase for a tenant-installed window or portable air conditioner from the 12-month rule, subject to that section's conditions.

If your last increase took effect on March 1, 2025, the earliest you can implement the next one is March 1, 2026. The 2026 guideline of 2.1% would apply because March 1, 2026 falls within the 2026 calendar year.

Notice Requirements for a 2026 Increase

Rent-controlled units require Form N1 (Notice of Rent Increase). You must give at least 90 clear days' notice before the effective date — the day you serve and the effective date itself are both excluded from the count.

If you're serving by regular mail, add five calendar days for deemed service under LTB Rules of Procedure. So for a January 1, 2026 effective date, your tenant must receive the notice by October 3, 2025 — and a mailed notice needs to be posted by September 28, 2025.

What About the Last Month's Rent Deposit?

Under RTA Section 106, you owe your tenant annual interest on the last month's rent (LMR) deposit at the guideline rate in effect when the interest becomes due — 2.1% when due in 2026. You can apply that interest directly to top up the deposit to match the new rent. When the increase matches the guideline exactly, the interest owed and the top-up required cancel out to zero, so no cash changes hands.

Looking Ahead

The 2027 guideline has already been published at 1.9%, reflecting a CPI period of June 2025 to May 2026. For landlords planning ahead, the lower rate means a smaller dollar increase next year — and a reason to ensure you don't miss this year's 2.1% window. Skipped years cannot be banked or compounded later.

For a complete walkthrough of Form N1, deemed service rules, and the above-guideline application process, the Ontario Rent Increase Guide covers the full compliance sequence step by step.

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