Rent control in Ontario is a set of rules under the Residential Tenancies Act, 2006 (RTA) that limits how often and by how much a landlord can raise a sitting tenant's rent. For most rental units, the landlord can raise the rent once every 12 months, by no more than the yearly guideline the Ontario government sets: 2.1% for 2026, with at least 90 days' written notice. Units first occupied as a home after November 15, 2018 are exempt from the guideline, so their rent can go up by any amount, but the once-a-year and 90-day notice rules still apply.
The Ontario government set the guideline for 2027 at 1.9%. Because of the 90-day notice rule, an increase served in the fall of 2026 usually takes effect in 2027, so check which year's guideline applies to the date the new rent starts.
| Rule | What it means |
|---|---|
| 2026 guideline | 2.1%, for increases that take effect in 2026 |
| 2027 guideline | 1.9%, for increases that take effect in 2027 |
| How often | Once every 12 months, and not in the first 12 months of a tenancy |
| Notice | At least 90 days, in writing, on the Landlord and Tenant Board's form |
| New units | First occupied after November 15, 2018: no limit on the size of the increase |
| Between tenants | Landlord and new tenant agree on any starting rent |
The 2026 rent increase guideline
Ontario's 2026 rent increase guideline is 2.1%. The guideline is the most a landlord can raise the rent on a rent-controlled unit, without approval from the Landlord and Tenant Board (LTB), the tribunal that hears rental disputes in Ontario, for an increase that takes effect in 2026. The province sets it each year from the Ontario Consumer Price Index (CPI), and announces it by August 31 for the following calendar year.
Under the RTA, the guideline can't be more than 2.5%, even when inflation runs higher. It was at that 2.5% cap for three years in a row, 2023 to 2025.
Here's the guideline over the last ten years, from Ontario's published history:
| Year | Guideline |
|---|---|
| 2027 | 1.9% |
| 2026 | 2.1% |
| 2025 | 2.5% |
| 2024 | 2.5% |
| 2023 | 2.5% |
| 2022 | 1.2% |
| 2021 | 0% (rent freeze) |
| 2020 | 2.2% |
| 2019 | 1.8% |
| 2018 | 1.8% |
| 2017 | 1.5% |
The 2021 freeze was a one-time pandemic measure: rents were held at 2020 levels for the whole year, and the freeze also covered units that are normally exempt.
On a rent-controlled unit at $2,000 a month, a 2.1% increase is $42, for a new rent of $2,042. On the same unit, a 1.9% increase in 2027 would be $38.
Units exempt after November 15, 2018
If a unit was first occupied as a residence after November 15, 2018, Ontario's rent increase guideline doesn't apply to it. The landlord can raise the rent by any amount, as long as they wait 12 months between increases and give 90 days' written notice on the proper form.
The exemption covers:
- New buildings, first lived in after November 15, 2018.
- Additions to existing buildings.
- Most new basement apartments and other self-contained units added to an existing detached house, semi or townhouse after that date.
The exemption turns on when the unit was first occupied for residential purposes, not when the building was bought or renovated. A 1970s house doesn't become exempt because it changed hands in 2024. A basement unit first rented in 2019 usually is, even though the house is older. If a tenant disputes it, the landlord has to prove the exemption, so keep the building permit, occupancy records or first lease that show the date.
The exemption applies to the unit, not the tenant. Every tenant who rents an exempt unit, now or later, is outside the guideline.
Rent increases above the guideline
A landlord can raise the rent above the guideline only with the Landlord and Tenant Board's approval, or a signed agreement with the tenant for specific improvements. An increase of this kind is called an above-guideline increase (AGI).
Applying to the Board
A landlord can apply to the LTB for an above-guideline increase for three reasons:
- An extraordinary increase in municipal taxes and charges for the property.
- Capital expenditures: major repairs, renovations, replacements or additions, such as a new roof or elevator, that are expected to last at least five years. Routine maintenance and cosmetic work don't count.
- Operating costs for security services from people who aren't the landlord's employees.
For capital expenditures and security services, the increase can't be more than 3% above the guideline in any year. If the Board approves a larger amount, it's spread over up to three years, at no more than 3% above the guideline each year. Increases for municipal taxes and charges have no such cap.
Agreeing with the tenant
A landlord and tenant can also agree in writing, on the Board's Form N10, to an increase above the guideline in exchange for a major repair, new equipment or a new service, such as adding air conditioning or a parking space. The most they can agree to is 3% above the guideline. The tenant can cancel the agreement in writing within five days of signing.
Vacancy decontrol: rent between tenants
When a tenant moves out, the landlord and the next tenant can agree on any starting rent. Vacancy decontrol is the name for this rule: the guideline limits increases during a tenancy, but not the rent a new tenant agrees to.
Once the new tenant moves in, the guideline applies again from that new rent (unless the unit is exempt). The first increase can't take effect until the new tenant has been there 12 months.
Vacancy decontrol is why rent on a long-term tenancy can sit well below what a similar vacant unit rents for. When you look at a building with tenants, the rent roll tells you what the units bring in today, not what they'd rent for if they were empty.
Notice rules: 90 days and Form N1
To raise the rent, the landlord must give the tenant written notice at least 90 days before the increase takes effect, on a form approved by the Landlord and Tenant Board. For most units, that's Form N1, Notice of Rent Increase. The Board also has Form N2 for units that are partially exempt.
The rules, together:
- At least 12 months must have passed since the tenant moved in or since the last increase.
- At least 90 days' written notice, on the Board's form.
- No more than the guideline for a rent-controlled unit, unless the Board approves an above-guideline increase or the tenant signs an N10 agreement.
An increase that doesn't follow these rules generally isn't valid, and the tenant can apply to the Board about it. The same 12-month and 90-day rules apply to exempt units, even though there's no cap on the amount.
What this means for buying a rental in Waterloo Region
When you buy a rental property with tenants, you take over their leases and their current rents. The tenancy doesn't end because the property sold, and you can only raise the rent under the rules on this page.
Before you make an offer, find out:
- When each unit was first occupied. A unit first lived in after November 15, 2018 is exempt from the guideline. One that was occupied before then is rent-controlled, whatever its age or condition. Ask for proof, such as permits and the first lease.
- The current rent and the date of the last increase for each tenant, from the leases and the rent roll. That tells you when the next increase can happen and how much it can be.
- Whether the units are legal. A unit built without permits can bring fire code and zoning problems, and it can affect your insurance and financing. See adding a unit in Waterloo Region for how legal units are approved here.
- What happens if you want the unit for yourself or your family. Ending a tenancy so a buyer can move in is possible in some cases, but it has strict rules, notice periods and forms. Talk to a real estate lawyer or a licensed paralegal before you buy a tenanted property you plan to live in.
Rents and vacancy in Waterloo Region
Here's the latest October Rental Market Survey from the Canada Mortgage and Housing Corporation (CMHC) for the Kitchener-Cambridge-Waterloo area: average rent by bedroom count, the vacancy rate, and the change in average rent from the year before.
| Unit | Average rent | Vacancy rate |
|---|---|---|
| Studio | $1,255 | Not reported |
| 1 bed | $1,546 | 4.7% |
| 2 bed | $1,816 | 3.9% |
| 3+ bed | $1,861 | 1.8% |
| All units | $1,716 | 4.0% |
CMHC Rental Market Survey, October 2025, Kitchener-Cambridge-Waterloo: purpose-built rental apartments. Average rent on units surveyed in both years changed 3.3% from the year before. Condos and basement units rented out aren't included.
CMHC's averages include tenants who've been in place for years, so they usually sit below the asking rent for a vacant unit. Compare a property's rent roll to these averages, and to current listings for similar units, to see how far its rents are from the market.
If you're comparing renting with owning instead, see rent vs buy. For the costs of buying, see closing costs in Ontario.