Ontario Rent Increases 2025: What Landlords and Tenants Must Know About the Guidelines

Every year, the Ontario government sets the rent increase guideline, which determines how much landlords can legally raise rent for most residential tenancies. Many landlords and tenants are unsure how the guideline works, who it applies to, and when additional approvals—such as Above Guideline Increase (AGI) applications—are required.

Understanding the 2025 rent increase rules helps both parties avoid errors, disputes, and unlawful increases. This article explains the guideline, exemptions, notice requirements, and key legal points under the Residential Tenancies Act (RTA). [Source: Residential Tenancies Act, 2006]

The 2025 Rent Increase Guideline

The Ontario rent increase guideline is set by the Ministry of Municipal Affairs and Housing each year. The guideline applies to most residential rental units and represents the maximum percentage by which a landlord may raise rent without applying for special approval. [Source: Ontario Ministry — Rent Increase Guideline]

Who the guideline applies to

• most private residential units
• apartments, condos, and houses
• basement units
• rooming houses
• care homes (basic rent portion)

Who is exempt

Some units are exempt from the guideline, including:

• units first occupied for residential purposes after November 15, 2018
• certain community housing units
• long-term care homes
• commercial tenancies

Exempt units may have rents increased above the guideline, but proper notice is still required.

Notice Requirements for Rent Increases

Even if a landlord is legally entitled to raise rent, strict rules apply.

1. Landlords must give 90 days' written notice

This is done using Form N1 — Notice of Rent Increase. [Source: LTB — N1 and AGI Information]

2. Only one increase every 12 months

Landlords cannot issue more than one rent increase within a 12-month period.

3. Increases must follow the guideline (unless exempt)

If the property is covered by the guideline, the increase cannot exceed the government-set percentage.

4. Tenants do not need to sign the N1

The notice is effective if properly served.

When an Above Guideline Increase (AGI) Is Allowed

Landlords may apply for an AGI if the guideline does not cover certain costs. AGIs require LTB approval and may be granted for:

Eligible reasons

• significant capital expenditures
• extraordinary increases in municipal taxes
• major repairs that extend the life of the building
• necessary replacements of major systems (e.g., boilers, roofs, plumbing)

Ineligible reasons

• cosmetic improvements
• normal maintenance
• routine upgrades
• landlord preference

AGIs require evidence, documentation, and an application to the LTB before taking effect.

Tenant Rights Regarding Rent Increases

Tenants may challenge rent increases that are:

• improperly served
• issued within 12 months of the last increase
• higher than the guideline (for guideline-covered units)
• based on incorrect occupancy timelines
• unsupported AGIs

Tenants can file an application with the LTB if they believe the increase is not lawful.

Landlord Responsibilities

To avoid disputes and delays, landlords must:

• verify whether the unit is guideline-covered or exempt
• calculate dates correctly
• serve the N1 notice properly
• keep records of previous notices
• provide supporting documents for AGIs
• follow RTA requirements without shortcuts

Improper increases can be voided by the LTB.

Common Mistakes or Misconceptions

• "All units are subject to the guideline." Newer units may be exempt.
• "Tenants must sign the N1." They do not.
• "Landlords can raise rent immediately after repairs." Only AGIs with LTB approval allow this.
• "Rent can be increased any time." Only once every 12 months.
• "A verbal rent increase is valid." Rent increases must be in writing on the prescribed form.

When to Seek Professional Assistance

A licensed paralegal can help when:

• a landlord needs advice on guideline vs. exempt status
• tenants dispute an unlawful increase
• an AGI application is being prepared
• notice timelines need to be calculated accurately
• a hearing at the LTB is required

Professional guidance reduces mistakes and helps ensure compliance with Ontario law.

Sources

1. Residential Tenancies Act, 2006 — Government of Ontario
   https://www.ontario.ca/laws/statute/06r17
2. Ontario Ministry of Municipal Affairs and Housing — Rent Increase Guideline
   https://www.ontario.ca/page/residential-rent-increases
3. Landlord and Tenant Board — N1 and AGI Information
   https://tribunalsontario.ca/ltb/forms/
4. CLEO "Steps to Justice" — Rent Increase Rules
   https://stepstojustice.ca/questions/housing-law/