Ontario Rent Increase 2027: The 1.9% Guideline and What Landlords Need to Know

The 2027 Guideline: 1.9%

Ontario's residential rent increase guideline for 2027 is 1.9%, published by the Ministry of Municipal Affairs and Housing on June 23, 2026. The figure tracks the change in Ontario's CPI from June 2025 through May 2026 and falls below the statutory 2.5% ceiling under RTA Section 120(2).

After two years at the 2.5% cap (2024 and 2025) and 2.1% in 2026, this is the lowest guideline Ontario landlords have seen since 2023. The rate applies to any lawful rent increase with an effective date falling in calendar year 2027.

Which Rate Applies — 2026 or 2027?

The governing rate depends entirely on the effective date of the increase, not when you sign or deliver the notice. A Form N1 served in October 2026 with an effective date of January 1, 2027 uses the 2027 rate of 1.9%. If instead the effective date is December 1, 2026, the 2026 rate of 2.1% applies.

This matters for planning. A landlord who delays serving the notice — pushing the effective date from December 2026 into January 2027 — will collect 0.2 percentage points less per month for the entire next year. On a $2,000 rent, that's $4 per month or $48 over 12 months.

Calculating the 2027 Increase

Multiply the current lawful monthly rent by 1.019:

• $1,500 → $1,528.50 (increase of $28.50)
• $2,000 → $2,038.00 (increase of $38.00)
• $2,400 → $2,445.60 (increase of $45.60)
• $3,000 → $3,057.00 (increase of $57.00)

The percentage applies only to the lawful base rent. Separate charges for parking, storage, or utilities — if formally severed under RTA Section 123 — are excluded from the calculation.

Notice Timeline for a January 1, 2027 Effective Date

To implement a rent increase effective January 1, 2027, the tenant must receive the notice at least 90 clear days in advance. Both the day of service and the effective date are excluded from the count, which means the last day for deemed receipt is October 3, 2026.

The service method affects your deadline:

• Personal delivery or mailbox: Complete by October 3, 2026
• Regular mail: Post by September 28, 2026 (five calendar days added for deemed service under LTB Rules)
• Email: Only valid if the tenant gave written consent in Section 15 of the Ontario Standard Lease — deliver by October 3, 2026

Use Form N1 for rent-controlled units (first occupied before November 16, 2018). Use Form N2 for exempt units. Serving the wrong form voids the notice entirely.

The LMR Deposit Reconciliation

Under RTA Section 106, you owe interest on the last month's rent deposit at the guideline rate in effect when the interest becomes due — 1.9% when due in 2027. That interest can offset the required deposit top-up. On a $2,000 rent, interest at 1.9% ($38.00) matches the 1.9% increase top-up ($2,038.00 − $2,000.00 = $38.00), so no cash needs to change hands when both apply.

If the tenant's LMR deposit is lower than the current rent (because a prior top-up was missed), the offset won't balance, and the tenant may owe a small shortfall. The guide's LMR Deposit Reconciliation Worksheet walks through the math.

Can You Skip 2027 and Bank It for Later?

No. Under RTA Section 119, each annual increase is limited strictly to the guideline in effect for the year the increase takes effect. A skipped year's percentage cannot be accumulated, carried forward, or rolled into a future increase. If you don't raise the rent in 2027, that 1.9% is gone permanently. The 2028 increase (rate not yet published) will still be calculated against whatever the rent is at that point — not against what it would have been.

Bill 60 Procedural Changes Affecting 2027

Several changes under Bill 60 (Fighting Delays, Building Faster Act, 2025) are now in force and affect how rent increase disputes play out:

• Order review deadline reduced from 30 days to 15 days (effective July 1, 2026)
• AGI service window shortened from 14 days to 7 days for serving LTB above-guideline orders
• Doubled maximum fines for illegal lockouts and bad-faith actions: $100,000 for individuals, $500,000 for corporations

These don't change the guideline itself, but they tighten the procedural window for both landlords and tenants once a dispute reaches the LTB.

For the complete Form N1 walkthrough, deemed service calendar worksheet, and above-guideline application process, the Ontario Rent Increase Guide covers every step from coverage audit to proof of service.

See more Ontario guides →