Ontario Rent Increase Guideline 2025: What Landlords Need to Know

The 2025 Rent Increase Guideline for Ontario has been set at 2.5%. This is the maximum percentage by which landlords can raise rent for most residential tenants without seeking approval from the Landlord and Tenant Board (LTB). This guideline applies to rent increases taking effect between January 1, 2025, and December 31, 2025.

Understanding the Rent Increase Guideline

The Ontario government calculates the rent increase guideline based on the Ontario Consumer Price Index (CPI), which tracks inflation by measuring changes in the costs of goods and services. While inflation can sometimes exceed this rate, the guideline is capped at 2.5% to protect tenants from excessive rent hikes.

Exceptions to the Guideline

Certain rental units are exempt from the rent increase guideline:

• Newer Units: Rentals first occupied for residential purposes after November 15, 2018, are not subject to the 2.5% cap.

• Vacant Units: When a unit becomes vacant, landlords are free to set a new rental rate for the next tenant without restriction from the guideline.

Steps for Implementing a Rent Increase

To legally raise rent within the guideline:

• Notice Period: Landlords must provide tenants with a minimum of 90 days' written notice before the rent increase takes effect.

• Frequency: Rent can only be increased once every 12 months for a given tenant.

• Proper Documentation: Use Form N1, the required notice form from the LTB.

Calculating Your Rent Increase

To calculate the new rent:

1. Determine your current rent amount.

2. Multiply the rent by 0.025 (representing 2.5%).

3. Add the resulting figure to the current rent to find the new rent total.

Example: If the current monthly rent is $1,500:

• Increase: $1,500 × 0.025 = $37.50

• New Rent: $1,500 + $37.50 = $1,537.50

Above-Guideline Rent Increases

Landlords seeking to raise rent beyond the 2.5% limit must apply to the Landlord and Tenant Board (LTB). Such applications are generally considered when the landlord faces significant expenses for:

• Major renovations or capital improvements.

• Unforeseen operating cost increases.

Why Partner with Ana Bastas Realty?

Navigating Ontario’s rental market can be complex, and ensuring you’re maximizing your property’s value while staying compliant is crucial. Ana Bastas Realty offers expert guidance to help landlords:

• Strategically price their units for optimal returns.

• Identify ways to increase property value through smart upgrades and marketing strategies.

• Connect with reliable tenants to reduce vacancy risks and turnover.

• Manage the rent increase process professionally, ensuring proper documentation and adherence to legal requirements.

With her extensive knowledge of the Toronto real estate market, Ana Bastas and her team are committed to helping landlords succeed. Whether you're managing a single unit or an extensive portfolio, Ana Bastas Realty can provide the insights and support you need.

For expert advice or to discuss your investment strategy, contact Ana Bastas Realty at ana@anabastas.ca today.

Let’s maximize your investment potential together!