How to Raise Rent in Ontario in 2026 (Form N1, 2.5% Cap Guide)

Quick answer: Ontario's 2026 rent-increase cap is 2.5%. You can raise once per 12 months per tenancy, and only after serving Form N1 with 90 days' written notice. Miss any of those three rules and the raise is void — the tenant gets to keep paying the old rent forever.

What is the 2026 Ontario rent-increase cap?

Ontario sets an annual guideline based on the Ontario Consumer Price Index. For the calendar year 2026, the guideline is 2.5% — up from 2.5% in 2025 and 2.5% in 2024. This applies to most rented units built and occupied before November 15, 2018. Anything after that date is exempt from the cap (see below).

Do I have to give notice? Yes — and here's how

Serving notice correctly is where most Ontario landlords lose the raise. The three rules:

1. Form N1 is mandatory. A text, an email, or even a signed letter doesn't count — the LTB requires N1 (or N2 for above-guideline).
2. 90 days written notice, calculated from the day the tenant receives it (not the day you sign).
3. Once every 12 months per tenancy — the clock resets on the day of the last raise, not on the lease anniversary.

Which units are exempt from the 2.5% cap?

• Units first rented after November 15, 2018 (new-build exemption under Bill 108).
• Vacant units — you can list any new rent on a fresh tenancy.
• Non-profit and co-op housing (regulated separately).
• Some social housing and long-term care residences.

Above-guideline increases (Form N2 / AGI)

If you spent big on capital repairs, extraordinary utility increases, or a security service, you can apply for an Above-Guideline Increase (AGI). Realistic timelines:

• File L5 with LTB → hearing scheduled 6–8 months later.
• Approval is granted for capital work that's a genuine improvement (not repair-and-maintain).
• Approved AGI is on top of the 2.5% guideline and can be spread over 3 years.

Common mistakes landlords make in Ontario

• Serving N1 in an email attachment without a wet signature — the LTB will throw it out.
• Raising rent in a fixed-term lease renewal without waiting 12 months from the last raise.
• Backdating N1 to hit the 90-day window — the tenant's receipt date is what counts.
• Bundling above-guideline expenses into the next N1 without filing L5. That's illegal collection.

Rent-increase math for a $2,200/month Ontario rental (2026)

Cap: 2.5%. Old rent: $2,200. New rent: $2,200 × 1.025 = $2,255/month. Extra revenue over the year: $660.

Now imagine you forgot to serve N1 on time. You lose $660 this year and the raise never happens for 2026 — you have to wait until 2027 to try again. That's the cost of a 20-second mistake.

How Central Rentals handles Ontario N1 for you

Inside the app you pick Rent → New notice → Ontario. Central Rentals auto-fills Form N1 with your unit, tenant, current rent, guideline-capped new rent, and the correct effective date (91+ days from send). E-sign delivery + audit log so you have proof of receipt for the LTB.

Generate a free Ontario N1 notice · See every provincial form we support

FAQ

Can I raise rent every year in Ontario?
Yes — once every 12 months, at or below the 2.5% cap, with 90 days' written notice on Form N1.

Can a tenant refuse a legal rent increase?
No. If the notice is on Form N1, at or below the cap, and 90+ days out, the increase takes effect automatically. If the tenant refuses to pay the new amount, you can serve Form N4 for non-payment.

What if the tenant moves out?
The cap doesn't follow the unit. Vacant units in Ontario can be listed at any rent — that's why some landlords wait for turnover before raising to market.

Where does the 2.5% number come from?
The Ontario government publishes the guideline each June for the following calendar year. The 2026 guideline of 2.5% was set on June 20, 2025.

Bottom line

Ontario rent-increase law rewards discipline: raise every 12 months at the cap, serve N1 correctly, keep the audit trail. Miss any one and you leave $660+/year on the table per unit. Central Rentals runs the whole flow — from notice to receipt — free with every landlord account.