Introduction

Rent increases in Ontario are one of those hot-button issues that affect landlords and tenants alike. Every year, thousands of renters wonder, “Can my landlord just hike the rent whenever they want?” And landlords, in turn, want to know exactly what their rights and limits are. Whether you’re a tenant trying to avoid a nasty surprise or a landlord trying to stay within legal bounds, understanding the rules around rent hikes is crucial.

In this post, we’ll break down everything you need to know about Ontario’s rent increase rules—from the annual government guideline to legal exceptions. We’ll also explore above-guideline increases, what types of properties are exempt, and how tenants can respond. Grab your lease and a cup of coffee—let’s dive in and decode Ontario’s rental laws without any legalese-induced headaches.

Key Takeaways

• Rent control applies to most residential units occupied before Nov 15, 2018.
• 2025 rent increase limit is capped at 2.5%, per Ontario’s rent guideline.
• Landlords must give tenants 90 days’ written notice using the proper form.
• Rent can only be increased once every 12 months.
• Above-guideline increases (AGIs) are allowed with approval from the LTB.
• New buildings occupied after Nov 15, 2018, may be exempt from rent control.

Understanding Rent Control in Ontario

What is Rent Control and How Does It Work?

Rent control in Ontario is part of the Residential Tenancies Act (RTA). It limits the amount a landlord can raise the rent each year. This amount is tied to the Rent Increase Guideline set by the province, which usually hovers around inflation rates. For example, if the guideline is set at 2.5%, a landlord cannot increase rent beyond that without applying for special permission.

Rent control generally applies to most private residential rental units, including apartments, condos, and houses. But it’s important to note: the guideline doesn’t apply to every unit equally. There are exemptions, which we’ll cover next.

Which Units Are Exempt from Rent Control?

Not every property in Ontario is subject to rent control. Here's a quick breakdown of exempt units:

If you're renting a brand new condo, chances are rent control rules don’t apply—at least not in the traditional sense. That means landlords of such properties can legally raise rent by more than the guideline without getting approval from the Landlord and Tenant Board (LTB). But they still need to follow notice rules.

2025 Ontario Rent Increase Guideline

Each year, Ontario sets a maximum amount that landlords can increase rent without needing approval. This helps strike a balance between landlord costs and tenant protections.

How is the Rent Increase Guideline Determined?

The Ontario government sets the Rent Increase Guideline annually based on the Ontario Consumer Price Index (CPI), which reflects inflation. They look at the average CPI over a 12-month period ending in May of the prior year. This system ensures that rent increases remain in line with the cost of living, rather than spiking unpredictably.

However, there’s a cap: the rent guideline can never exceed 2.5%, even if inflation is higher. So in years where CPI rises sharply, landlords might not be able to raise rent in line with their costs.

What is the Maximum Rent Increase for 2025?

For 2025, the Ontario government has announced that the maximum rent increase is 2.5%—the same as in 2024. This is the legal limit for most residential units that fall under rent control.

If you're a landlord, this means you can increase your tenant’s rent by up to 2.5%, once every 12 months, assuming proper notice is given. If your property is exempt (like a new build), you can increase rent more—but again, notice rules still apply.

Legal Requirements for Increasing Rent

Even if the rent increase is within the guideline, landlords can’t just slap on the new amount overnight. The law has strict procedures for how and when increases can happen.

Notice Period and Form Requirements

Landlords must provide at least 90 days’ written notice before increasing rent. This notice must be given using the official Ontario form—Form N1 (“Notice of Rent Increase”). Verbal notices or casual emails don’t cut it.

Here’s what the notice must include:

• Current rent amount
• New rent amount
• Percentage increase
• Date the increase takes effect

Failing to use the correct form or providing insufficient notice can void the rent increase altogether, meaning the tenant legally owes only the original amount.

Frequency of Rent Increases

Under Ontario’s RTA, landlords can only increase the rent once every 12 months for a given tenant. The clock resets from the date the last increase took effect—not the date notice was given.

So if you raised rent on April 1, 2024, the next legal increase can only take effect on April 1, 2025, and not a day sooner. This protects tenants from facing multiple hikes within a single year.

Above-Guideline Rent Increases (AGIs)

While the guideline sets a general ceiling, there are situations where landlords can legally go beyond it—known as Above-Guideline Increases (AGIs).

When Can a Landlord Apply for an AGI?

Landlords can apply to the Landlord and Tenant Board (LTB) for an AGI in special situations, such as:

• Major capital repairs or renovations (e.g., roof replacements, new HVAC systems)
• Increased municipal taxes or charges
• Extra security services or amenities added to the property

To get approval, the landlord must submit an application to the LTB, provide evidence, and show that the costs are legitimate. The process can take months, and tenants are allowed to challenge the claim.

How Tenants Can Dispute AGIs

If you’re a tenant and receive notice of an AGI, you’re not powerless. You can:

1. Request documentation showing why the increase is justified.
2. Attend the LTB hearing and present your side.
3. File a formal dispute if you believe the AGI is excessive or unfair.

Tenants have rights—and the LTB is required to weigh both sides before approving any increase beyond the standard guideline.

Exceptions and Special Circumstances

There are always exceptions to every rule, and Ontario’s rent laws are no different. Some landlords and tenants operate outside traditional rent control.

New Builds and Exempt Properties

Units first occupied after November 15, 2018 are exempt from rent control. That includes:

• Brand-new apartment buildings
• Condo units that were never rented before
• Basement apartments in newly built homes

This exemption gives landlords more flexibility in pricing but still requires them to follow notice and timing rules. Even if a landlord can raise rent by 10%, they still need to give 90 days’ notice.

Agreements Outside of Rent Control

Some rental arrangements don’t fall under the Residential Tenancies Act at all. Examples include:

• Short-term vacation rentals (like Airbnb)
• Institutional housing (college dorms, hospitals)
• Certain types of shared accommodations (e.g., if the tenant shares a kitchen or bathroom with the landlord)

In these cases, rent control rules don't apply—but other consumer protections might. Always check the legal category of your rental before assuming what rules apply.

Conclusion

Rent increases in Ontario aren’t as unpredictable as they might seem—if you know the rules. Whether you're a tenant concerned about a sudden hike, or a landlord trying to stay compliant, understanding the 2025 rent guideline, notice requirements, and possible exemptions can save you a whole lot of stress.

By knowing your rights and responsibilities, you can avoid legal hiccups and maintain a better landlord-tenant relationship. Always check whether your unit is subject to rent control, follow the notice periods, and when in doubt—consult the Residential Tenancies Act or speak with a legal expert. After all, housing is too important to leave to guesswork.

FAQs

Can a landlord raise rent more than 2.5% in Ontario in 2025?

Only if they apply for and receive approval from the Landlord and Tenant Board for an above-guideline increase.

What happens if a landlord increases rent without proper notice?

The increase is considered invalid, and the tenant is not legally required to pay the higher rent.

Do rent control rules apply to condos?

Yes—unless the condo was first occupied as a residential unit after Nov 15, 2018. In that case, it may be exempt.

How can I find out if my unit is rent-controlled?

Check the date your unit was first occupied as a residential rental. If it was before Nov 15, 2018, it’s likely rent-controlled.

Can a landlord increase rent during a fixed-term lease?

Yes, but only if the lease allows it and the landlord gives 90 days’ notice. The new rent can’t take effect until the lease term ends unless otherwise agreed.

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