Ontario government sets 2025 rental cap for most units

  6/28/2024 |   SHARE
Posted in Government and Regulation by Vanguard Realty | Back to Main Blog Page

Ontario is holding the annual rent increase guideline for 2025 at 2.5 per cent. This is currently the lowest rate in the country and below the average inflation rate of 3.1 per cent. The rent increase guideline is the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board.

The guideline is based on Ontario’s Consumer Price Index, a measure of inflation calculated by Statistics Canada using data that reflects economic conditions over the past year. Under the Residential Tenancies Act, the guideline is capped at 2.5 per cent to help protect tenants from rising interest rates that would result in higher rent. Without the cap, the recent rate of inflation would have resulted in an increase of 3.1 per cent in 2025.

Rent increases are not automatic or mandatory. Landlords may raise rent only if they give tenants at least 90 days’ written notice using the correct form. At least 12 months must have passed since the first day of the tenancy or the last rent increase. If a tenant believes they have received an improper rent increase, they can apply to the Landlord and Tenant Board to request a correction.

Over the last three years, Ontario has seen the highest housing starts and rental housing starts in over three decades.

Quick Facts

• The rent increase guideline applies to the vast majority of rental households — approximately 1.4 million — covered by the Residential Tenancies Act. It does not apply to rental units occupied for the first time after November 15, 2018, vacant residential units, community housing, long-term care homes or commercial properties.
• In most cases, the rent increase cannot be more than the rent increase guideline. Landlords can apply to the Landlord and Tenant Board for above-guideline rent increases, under certain circumstances, such as after eligible capital work has been paid for and finished.
• Tenants who may need help to pay their rent are encouraged to contact their local service manager to see what housing supports are available in their community.
• Ontario has the highest maximum fines in Canada for residential tenancy offences.

Source: Ontario Government

Ontario Government, Ontario Rental Market