Ontario’s Landlord and Tenant Board (LTB) has released the annual rent increase guideline for 2025. If you’re a landlord planning on increasing your rent, knowing how high you can set your new price is essential to staying compliant with the law and setting expectations for your tenant.

In this guide, we’ll cover everything you need to know about the new guideline, including the maximum rent increase allowed for 2025, the types of properties it applies to, and situations where you can raise your rent by more than the legal limit. We’ll also explain how and when you must notify your tenant of a rent increase.

2025 updates to Ontario’s rent increase guideline

The rent increase guideline in Ontario for 2025 is 2.5%. In other words, 2.5% is the maximum you can raise your tenant’s rent during the year. For example, if you rent a property for $1,500 monthly, you can increase the price to $1,537.50. If you’d like to increase your rent higher than this limit, you’ll need to obtain approval from the LTB.

In most cases, you can increase the rent price for a residential property 12 months after:

• The last rent increase
• The start date of the tenancy

As the landlord or property owner, you must provide your tenant with 90 days written notice using the appropriate form before it takes effect.

What properties does the Ontario rent increase guideline affect?

The 2025 rent increase guideline applies to most residential rental properties outlined in the Residential Tenancies Act, 2006, (RTA) including:

•         Rented houses
•         Apartments
•         Basement apartments
•         Condos
•         Care homes
•         Mobile homes
•         Land lease communities

The rent increase guideline doesn’t apply to:

•         Vacant residential units
•         Community housing units
•         Long-term care homes
•         Commercial properties
•         Subsidized housing (different rent control rules govern these property types)

2025 rent increase exceptions

In some cases, you can apply to the LTB to raise your rent more than the allowable amount under the rent increase guideline. According to Tribunals Ontario, here are the instances in which you can request an exemption:

• Your municipal taxes and charges have increased by an “extraordinary amount.”
• You performed significant renovations, repairs, replacements, or added new additions to your property.
• You faced a substantial increase in security expenses.  

Some exceptions to the Ontario rent increase guideline apply automatically.

For example, the guideline pertains only to the rent portion of care homes, not to the costs associated with services like nursing, food, and cleaning. As a result, you could raise the fees associated with delivering such services as high as you deem reasonable, even if they exceed the guideline when combined with the rent fee.

There’s also an exemption for new buildings, additions to existing buildings, and new basement suites occupied for the first time after November 15, 2018. To avoid legal disputes related to the residential occupancy date, keep relevant records as proof. Some examples are building permits, occupancy permits, and home warranty documents.

How to raise rents in Ontario

Are you thinking about raising rent for your Ontario property in 2025? Here’s how to do it:

Step 1: Determine your new rent price

Take some time to determine a suitable rent price. You’ll want to consider average rental prices in your area for units similar to yours, increases in your operating costs, and what renters would be willing to pay. Striking the right balance between these variables is critical to ensure your rental generates a healthy profit margin while remaining attractive to tenants.

Choose something fair and reasonable based on your property’s value, market demand, and other relevant factors.

Step 2: Complete the required form

In Ontario, you must supply your tenant with specific documentation whenever you raise your rent. Depending on your property type and the nature of the tenancy, you’ll need to fill out one of the following forms:

• N1 Notice of Rent Increase with instructions
• N2 Notice of Rent Increase (Unit Partially Exempt) with instructions
• N3 Notice to increase the rent and/or Charges for care service and meals with instructions
• N10 Agreement to Increase Rent Above the Guideline with instructions

Step 3: Notify your tenant of the upcoming rent increase

Under Ontario’s residential tenancy law, you must give your tenant at least 90 days notice of an impending rate increase.

Send your tenant the appropriate form and any other supporting documentation that provides further details about the upcoming rent hike. They must receive the documents on time, so it’s best to deliver them personally or use registered mail. You can also serve the notice through email. It’s always a good idea to follow up with the tenant to ensure they’ve received it.

Resolving issues about rent control

Contact the LTB to determine whether your rental unit is eligible for an exemption under the rent increase guideline. To improve your chances of qualifying, include an additional term under section 15 of the lease agreement, stating that the property is exempt from the rent increase limit. Make sure to retain all records to support your case.

Our final thoughts

The maximum allowable rent increase in Ontario for 2025 is 2.5%, which applies to most residential rental properties in the province.

As a landlord, you must follow proper procedures to raise your rent. This means providing your tenants a minimum of 90 days’ notice using the appropriate form. In addition, you can increase your rent price only if 12 months have passed since the last increase or the start date of a new tenancy. 

Specific properties are exempt from the annual rent increase guideline, such as commercial properties, vacant units, and long-term care homes. Depending on your circumstances, you can also request approval from the LTB to raise your rent beyond the allowable amount. 

For further details about Ontario’s 2025 rent increase guidelines, visit the Government of Ontario’s website. Check out our Ontario rental documents page too, where we’ve compiled every form you’ll need to inform your tenant of changes to their lease agreement.