Rent Cap New Brunswick: The 3% Limit Explained for Landlords

The 3% Cap: What It Actually Says

Since February 1, 2025, residential rent increases in New Brunswick are capped at 3.0% per year under Section 11.12 of the Residential Tenancies Act. The provincial government confirmed in June 2026 that this cap extends through December 31, 2027.

The 3% is a ceiling, not a floor. You can raise rent by 1%, 2.5%, or any amount up to 3.0% — you just can't exceed it without prior written approval from a Residential Tenancies Officer. The figure is based on the New Brunswick Housing Corporation's annual review of CPI changes, CMHC rental market data, and provincial vacancy rates, published by June 1 each year.

What the Cap Applies To

The cap covers every residential tenancy governed by the Residential Tenancies Act — apartments, houses, rented rooms, mobile home sites, and boarding arrangements. It applies to fixed-term leases, month-to-month tenancies, week-to-week tenancies, and year-to-year leases equally. Written or oral, the cap doesn't care.

What it doesn't apply to: setting the initial rent for a new tenant. When a unit is vacant and a new tenant signs on, the landlord can set the starting rent at market rate. The 3% cap applies to later rent increases during an ongoing tenancy. The separate default 12-month frequency limit for tenancies under Section 11.1 can be varied by written agreement; mobile home site increases follow Section 25.4.

The Deemed 3% Mechanism

This is the provision most landlords don't know about. Under the old rules, a notice proposing more than the legal maximum was completely void — the landlord had to start over with a new notice and a fresh six-month wait.

Section 11.12 changed that. If you serve a notice proposing, say, 5% without prior officer approval, the notice isn't voided. Instead, it's legally "deemed" to be a 3% increase. The tenant pays only the capped amount on the effective date.

In practice: a landlord charging $1,400/month who accidentally proposes 5% ($1,470) would legally collect $1,442 (3% of $1,400 = $42). The excess $28 is unenforceable.

This is a safety net, not a strategy. You should always calculate correctly, because serving an over-cap notice still signals poor process — and if a tenant files a review, the officer will scrutinize everything else in your notice too.

The Above-Cap Route: Above 3% to 9%

Landlords who've spent significant money on capital renovations can apply to exceed 3%, up to an absolute maximum of 9%. The application goes to the Tenant and Landlord Relations Office and must be approved by an officer before you serve the notice.

Qualifying expenditures are capital improvements that prolong the building's physical life — not routine maintenance or cosmetic upgrades. The officer reviews the evidence, and can approve the full requested percentage, a partial amount, or reject the application entirely.

Serving a 7% notice without prior approval doesn't get you 7% — it gets you the deemed 3%.

Doing the Math

The calculation is straightforward: multiply the current monthly rent by the approved percentage.

Round to the nearest cent. The new amount goes on the notice along with the current rent, so the tenant can verify the math themselves.

When the Cap Might Change

The NBHC's annual review can adjust the rate. The current 3% is fixed through 2027, but the review mechanism exists for years beyond that. Housing Minister David Hickey has confirmed that the structure — annual review based on CPI, CMHC data, and vacancies — will continue.

For landlords planning ahead, the safe assumption is that the 3% cap persists at least through 2027. The separate document rule, 6-month notice, and 12-month frequency limit are permanent structural changes that exist independently of the cap.

For a complete walkthrough of every step — from calculating the increase to serving the notice to handling a tenant challenge — see our Rent Increases in New Brunswick guide.

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