Prince Edward Island’s housing authority, the Island Regulatory and Appeals Commission (IRAC), decides each year what the rent increase guideline will be. If you plan to increase your rents in 2025, understanding the IRAC’s guideline will help you avoid complaints from your tenants and legal trouble.
Here’s everything you need to know about PEI’s new rent increase guideline, including the maximum rent amount, how much notice to give to your tenants, and circumstances where you can set a rent price higher than the guideline.
2025 updates to Prince Edward Island’s rent increase guideline
The rent increase guideline in PEI for 2025 is 2.3%. So, if your tenant’s current rent is $1,400 per month, the most you can charge them in 2025 is $1,432.20.
Under exceptional circumstances, you can increase the rent by more than 2.3%, but you must receive permission from the Rental Office. Additional rent increases beyond the legal limit are capped at 3%, so the most that you can raise your tenant’s rent is 5.3%, without exceptions.
As per the Residential Tenancy Act, only one rent increase is allowed annually for residential units. This means you can implement a rent hike 12 months after:
- The last legal rent increase
- The start date of the tenancy
For your rent price to be valid, you must give your tenant at least three months’ notice before it takes effect using an approved form. This rule applies to both fixed-term and month-to-month leases. The exceptions are weekly tenancies, which require three weeks’ notice.
2025 rent increase exceptions
Depending on your circumstances, you may be able to raise rents above the guideline of 2.3%.
To do so, you have to get permission from the Rental Office. The organization will consider several factors when deciding whether to approve your application, including:
- Increases in your operating expenses and capital expenditures in the last three years
- The date and amount of the previous rent increase
- Your expectation of earning a reasonable return on your investment
- Whether the extra rent increase is necessary for you to avoid losing money
To start the process, complete and send two forms to the Rental Office:
- Form 9 – Landlord Application to Request Additional Rent Increase, which you must also give to your tenant within ten days of submitting to the Rental Office
- Form 10 – Landlord Statement of Income and Expenses
As noted previously, you can only ask for an additional 3% rent increase on top of the 2.3% guideline.
How to raise rent in Prince Edward Island
The following steps explain how to increase rent for PEI residential properties, both for fixed-term and month-to-month leases.
Step 1: Determine your new rent price
Calculate your current profit margin and then determine how much you’d have to boost your rent price to maintain it.
Next, research the local rental market in your area to figure out the average rate landlords are charging. By doing so, you can set a price that allows you to earn a healthy profit while allowing you to retain your tenant.
Step 2: Prepare the notice of rent increase
In PEI, you must use a government-approved document to inform your tenant that you’re raising their rent. For a standard rent increase, fill out the following form:
If you wish to raise the rent higher than the guideline, complete these documents instead:
- Form 9 – Landlord Application to Request Additional Rent Increase
- Form 10 – Landlord Statement of Income and Expenses
Form 9 should be submitted to your tenant and the Rental Office, while Form 10 should only be given to the Rental Office.
Consider adding a note that explains why you’re increasing your rent. You can include details such as rising operating expenses and renovations you’ve done to the rental unit. This could help minimize objections from your tenant.
Step 3: Notify your tenant of the rent increase
You must give your tenant at least three months’ notice before the new rent price takes effect. If your tenant pays rent weekly, provide a minimum of three weeks’ notice.
To ensure your tenant receives your notice, consider delivering it in person, or sending it by certified mail. Email is also acceptable. Whichever method you choose, follow up to confirm it’s been received.
If you fail to notify your tenant in time, your rent increase is considered to be unlawful. As a result, your tenant can apply to the Rental Office to obtain a refund on the extra rent paid.
Resolving issues about rent control
Should there be a dispute between you and your tenant about a rent increase, you can arrange a hearing with the Rental Office. If your tenant refuses to pay the new rent fee, fill out and submit Form 2(B) – Landlord Application to Determine Dispute. This will start the hearing process. Click here to learn how to prepare for a hearing.
During the hearing, you’ll have the opportunity to present your case to a Rental Officer who will decide on a resolution in accordance with the Residential Tenancy Act. If you disagree with the Rental Officer’s decision, you can make an appeal to the IRAC.
Our final thoughts
The maximum allowable rent increase in PEI for 2025 is 2.3%. You can raise rents once per year, and you must give your tenant at least three month’s notice using the appropriate form.
Though the rent increase guideline is capped at 2.3%, you can apply to the Rental Office for an additional increase of up to 3%. In your application, you must demonstrate that the annual rent increase guideline isn’t sufficient to offset your operating costs or capital expenditures.
For more details about PEI’s 2025 rent increase guidelines, visit the province’s Rental Office site.
