The 2020 rent increase guideline is 2.2% and applies to most private residential rental accommodation covered by the Residential Tenancies Act. The guideline is the most a landlord can increase the rent without applying to the LTB.
The guideline does not apply to:
There is no limit to how much a landlord can increase the rent each year for these units.
Timing of rent increases: In most cases, the rent can be increased 12 months after a tenant first moved in or 12 months after the tenant's last rent increase. A tenant must be served a notice of a rent increase with a Landlord and Tenant Board approved form at least 90 days before the rent increase takes effect.
Calculation of the guideline: The rent increase guideline is based on the Ontario Consumer Price Index (CPI), which is calculated monthly by Statistics Canada. The 2020 guideline is calculated by averaging the percentage increase in the Ontario Consumer Price Index during the 12 months from June 2018 to May 2019. By law, the rent increase guideline cannot be more than 2.5 per cent, even if the CPI increase is higher.
Sample rent increase calculation: The monthly rent of an apartment is $1,000 beginning June 1, 2019. With proper written 90 days' notice to the tenant, the landlord could increase the rent 12 months later, on June 1, 2020.
This is the calculation for the rent increase:
Above guideline increases: Landlords can apply to the LTB for an increase above the guideline for any of the following reasons:
A landlord may also increase the rent at any time if the landlord and the tenant agree that the landlord will add a new service or facility such as a parking space, air conditioner or storage locker.
The guideline and rent deposits: Every year, the landlord must pay the tenant interest on the rent deposit. The interest rate is the same as the rent increase guideline. For more information on rent deposits, see the Guide to the Residential Tenancies Act.