- Most Ontario rental units are subject to the annual rent increase guideline — a cap the government sets each year.
- Units first occupied for residential purposes on or after November 15, 2018 are generally exempt from the guideline cap — the landlord can raise the rent by any amount with proper notice.
- Even exempt units still require proper written notice (an N1) and generally only one increase every 12 months.
- “Rent control” caps the increase for a sitting tenant — it does not cap what a landlord charges a brand-new tenant after a unit is vacated.
- Whether a unit is exempt turns on when it was first occupied, not when you personally moved in — and it can be worth confirming.
The Short Answer
In Ontario, most rental units are covered by the annual rent increase guideline — a yearly cap on how much a landlord can raise a sitting tenant's rent. But units first occupied for residential purposes on or after November 15, 2018 are generally exempt from that cap: the landlord can increase the rent by any amount, as long as they still give proper N1 notice, at least 90 days in advance, and no more than once every 12 months. Whether your unit is exempt turns on when it was first occupied. If a large increase has you unsure, our landlord and tenant lawyers can confirm whether it is lawful.
How Rent Control Works
“Rent control” in Ontario is really a control on increases for a tenant who is already living in the unit. For a guideline-covered unit, the landlord cannot raise the rent above the government's annual percentage without a special order. It does not freeze rent, and it does not dictate the starting rent for a brand-new tenancy.
The Annual Guideline
Each year the province publishes a rent increase guideline — the maximum percentage increase allowed for most covered units that year. A landlord who wants to exceed it for a controlled unit must apply to the Landlord and Tenant Board for an Above-Guideline Increase (AGI), which is only available in specific circumstances such as major capital work.
Use our Rent Increase Guideline Calculator to see what a lawful guideline increase looks like for a covered unit.
The November 15, 2018 Exemption
To encourage new rental construction, Ontario exempted newer units from the guideline cap. Units first occupied for residential purposes on or after November 15, 2018 are generally not subject to the annual guideline — meaning the landlord can raise a sitting tenant's rent by any amount, provided the process rules are followed. This is the single most important dividing line in Ontario rent increases today.
What “First Occupied” Means
The test is when the unit was first occupied for residential purposes — not when you personally signed your lease. A brand-new building, or a newly created unit (for example, a purpose-built basement apartment) first lived in on or after November 15, 2018, can be exempt even for a tenant who moved in years later. Older units that were occupied before that date generally remain covered by the guideline.
Rules That Apply to Exempt Units Too
Exempt does not mean unregulated. Even for an exempt unit, the landlord must:
- Give proper written notice using the N1 form
- Provide at least 90 days' notice of the increase
- Generally wait at least 12 months between increases (and 12 months from the start of the tenancy)
Even where there is no percentage cap, an increase given without proper notice or more than once in 12 months is not valid. Process still matters.
Rent Control vs. New Tenants
Rent control protects the person currently living there. When a unit becomes vacant, a landlord can generally set the starting rent for the next tenant at market — often called vacancy decontrol. So the same unit can be “controlled” for a long-term tenant and re-set to a much higher rent once it turns over.
How to Tell Which Side You Are On
- Ask the landlord when the unit was first occupied for residential use
- Consider the building's age and whether the unit is newly created
- Compare any proposed increase to the year's guideline — a much larger increase suggests the landlord is claiming an exemption or an AGI
- If unsure, confirm before agreeing to pay a large increase
Common Mistakes
Units first occupied on or after Nov 15, 2018 are generally exempt from the guideline — a common surprise for tenants.
Even exempt units need proper written notice and 90 days — a verbal or short-notice increase is not valid.
Rent generally cannot be increased more than once every 12 months, controlled or not.
The exemption turns on when the unit was first occupied — not when you signed your lease.
Not sure whether your unit is rent-controlled or whether an increase is lawful? Call our Toronto landlord and tenant team at 416-274-2222 for a free consultation.
Frequently Asked Questions
Most units are subject to the annual rent increase guideline. However, units first occupied for residential purposes on or after November 15, 2018 are generally exempt from the guideline cap. Whether yours is covered depends on when the unit was first occupied, not necessarily when you moved in.
It is the maximum percentage a landlord can increase rent for most sitting tenants in a given year, set annually by the Ontario government. For guideline-covered units, a landlord generally cannot exceed it without a special Above-Guideline Increase order from the Board.
For units first occupied for residential purposes on or after that date, the annual guideline cap does not apply. The landlord can increase the rent by any amount, as long as they give proper written notice and respect the 12-month rule. This was intended to encourage new rental construction.
Effectively yes on amount, but not on process. The landlord must still give proper written notice using the N1 form, give at least 90 days notice, and generally can only raise the rent once every 12 months. There is no cap on how much, but the procedure still applies.
For both controlled and most exempt units, rent can generally be increased only once every 12 months for a sitting tenant, and only after at least 90 days written notice using the proper form.
No. Rent control caps increases for a sitting tenant. When a unit becomes vacant, a landlord can generally set the starting rent for a new tenant at whatever the market will bear — this is sometimes called vacancy decontrol.
You can ask the landlord, check building permit or occupancy records, or look at the building's age and history. Because the exemption turns on first residential occupancy, a newer building — or a newly created unit in an older building — is more likely to be exempt. If it matters to your situation, it is worth confirming carefully.
Ask for the basis of the exemption (the date the unit was first occupied for residential purposes). If the increase seems to exceed the guideline and you are not sure the exemption applies, you can raise it with the Landlord and Tenant Board or get legal advice before agreeing to pay.