The 2026 guideline: 2.1%
Ontario sets the guideline once a year, usually announcing it the summer before. For increases that take effect in 2026 the guideline is 2.1%. For comparison, the guideline was 2.5% for each of 2023, 2024 and 2025, which was the cap the province applies in years when inflation would have pushed it higher.
The year that matters is the year the increase takes effect, not the year you serve the notice. A notice served in October 2026 for an increase on January 1, 2027 uses the 2027 guideline. If that figure has not been published yet, you cannot quote it; KeyToRental refuses to plan an increase for a year whose guideline it does not have, rather than guessing.
This is general information, not legal advice. The rules come from Ontario's Residential Tenancies Act and the Landlord and Tenant Board (LTB). For the current forms and guidance see tribunalsontario.ca/ltb, and speak to a lawyer or paralegal about your own situation.
Working out the new rent
Multiply the current lawful rent by 2.1% and add it. For example, on a rent of $2,000 a month the maximum increase is $42, so the new rent is $2,042. On $1,650 the increase is $34.65 and the new rent is $1,684.65. You can round down; you cannot round up past the guideline.
The base is the rent the tenant is lawfully paying now, not what similar units rent for and not what you wish you had charged at the start. If the tenant is paying $1,800, 2.1% of $1,800 is the ceiling.
The 90-day rule: the N1 form
A rent increase has to be in writing, on the LTB's N1 Notice of Rent Increase form, and the tenant has to receive it at least 90 days before the increase takes effect. A text message or an email saying "rent goes up next month" is not notice, and an N1 served 89 days out is not notice either. The increase also has to start on the first day of a rental period, which for most tenancies is the day rent is due.
For example: if rent is due on the 1st and you want the new rent from January 1, 2027, the tenant must have the N1 no later than October 3, 2026. Serve it in September and you have a margin. Mail adds days before the notice counts as received, so serve early or hand it over.
If you miss the window, the increase simply moves to the next rent period that is 90 or more days out. You do not lose the year, only the months in between.
The 12-month rule
Rent can be increased at most once every 12 months. The clock starts from the later of the day the tenant moved in or the day the last increase took effect. A tenant who started on March 1, 2026 cannot be given an increase that takes effect before March 1, 2027, no matter how early the N1 is served.
The two rules stack. Take the anniversary date, make sure the effective date is on or after it, then serve the N1 at least 90 days before that effective date.
When the guideline does not apply
Not every unit is covered. Units first occupied for residential use after November 15, 2018 are generally exempt from the guideline, though the N1 and the 12-month rule still apply. Some other housing (for example, certain non-profit or care arrangements) has its own rules. An increase above the guideline on a covered unit needs an LTB order, or a written agreement with the tenant tied to a real improvement or service, and both have their own forms. If you are not sure whether your unit is covered, find out before you serve; a guideline increase served on an exempt unit is not the problem, but an above-guideline increase served on a covered one is.
How KeyToRental plans an increase
KeyToRental keeps the lawful rent, the tenancy start date and the last increase on the lease. When you plan an increase it applies the guideline for the effective year, checks the 90-day and 12-month rules against Toronto's calendar day, and tells you the earliest lawful effective date and the new rent. If a date fails a rule it says which rule and why. You copy those figures and dates onto the LTB's N1 form and serve it yourself; once the increase takes effect, update the rent on the lease so the ledger and the next anniversary follow it.