The Ontario rent increase guideline for 2027 is 1.9%. Ontario announced the figure on its residential rent increases page, updated June 23, 2026. It applies to rent increases that take effect in the 2027 calendar year for units covered by the guideline. On a $2,000 rent, 1.9% is $38 a month.
That is the whole headline. The mistakes landlords make sit underneath it, in the notice form, in the 12-month count, and in units that are not covered by the percentage at all. A defective notice does not produce a smaller increase. It produces no valid increase, and the work starts over.
RentSetGo Property Management handles these notices for Ottawa owners every year, on single units and on small plexes across the city. This guide sets out the rule and the dollars, plus the points where a self-managed increase goes wrong in practice.
The 2027 guideline is 1.9%. The law caps it at 2.5%, and it only works if the notice is right.
The guideline for 2027 is 1.9%, and the guideline for 2026 was 2.1%. The province sets the figure each year from the Ontario Consumer Price Index, averaged over the 12 months ending in May, and section 120 of the Residential Tenancies Act, 2006 caps it at 2.5% no matter what inflation does.
Two consequences follow from that cap. First, a landlord cannot pass through a bad year on costs by adding a few points to the guideline. Second, a guideline a landlord skips is gone. Unused percentage cannot be saved and used in a later year, so a landlord who leaves rent flat for three years cannot add the missed years together in year four.
At 1.9%, a $1,800 rent rises by $34.20 a month, a $2,000 rent rises by $38.00, and a $2,500 rent rises by $47.50. The yearly gain runs from about $410 to about $570 at those rent levels, which is why owners who manage several doors treat the notice as a routine annual task rather than an optional one.
| Current monthly rent | 2027 increase at 1.9% | New monthly rent | Extra rent over 12 months |
|---|---|---|---|
| $1,800 | $34.20 | $1,834.20 | $410.40 |
| $2,000 | $38.00 | $2,038.00 | $456.00 |
| $2,500 | $47.50 | $2,547.50 | $570.00 |
Work the percentage on the lawful rent, not on the rent you wish you were charging. If last year’s increase never took effect because the notice was defective, last year’s percentage is not hiding inside this year’s number.
Rent can go up once in any 12-month period, counted from the start of the tenancy or from the date of the last increase. A tenancy that began on March 1, 2026 cannot see an increase before March 1, 2027, even though the calendar year has turned and a new guideline has started.
This is the rule that catches landlords who bought a tenanted property mid-year. The clock belongs to the tenancy, not to the owner. A new owner inherits the last increase date from the previous landlord’s records, so ask for the rent history and the last notice before closing, and keep it with the lease file. Our guide to Ontario landlord rights and responsibilities sets out the wider duties that come with that file.
You give notice on Landlord 
and Tenant Board Form N1, and the tenant must receive it at least 90 days before the increase takes effect. A landlord’s own letter does not count as a substitute for the Board’s form. Neither does an email, and the Ontario rent increase page is the province’s own statement of the rule.
Work backwards from the date you want. For an increase taking effect January 1, 2027, the Form N1 had to reach the tenant by October 3, 2026. Miss that date and the increase moves to the next month for which a full 90 days is still available. There is no short-notice version and no tenant signature that repairs a late notice, because a tenant cannot sign away the notice period the Act sets.
Serve the form a way the Board accepts, and keep proof of how and when you served it. If the amount is ever disputed, the landlord carries the paperwork.
Units first occupied for 
residential purposes after November 15, 2018 are exempt from the guideline percentage. The exemption covers new buildings first occupied after that date. It also covers additions to existing buildings and most new basement apartments created after that date.
Exempt does not mean unregulated. The 12-month rule still applies, written notice is still required at least 90 days ahead, and the Board has a separate notice form for exempt units, Form N2. What the landlord gains is freedom on the amount, not freedom from the process.
The guideline also does not set the rent in these situations:
New-build investors need to test the exemption against the unit, not the project. Two units in one Ottawa development can have different first-occupancy dates. Our first-time landlord guide for Ottawa walks through the checks to run before a first tenancy starts.
Yes, through an above-guideline increase, and only with the Landlord and Tenant Board’s approval. The landlord applies on Form L5 and asks the Board to allow an increase above the guideline for eligible capital work. Extraordinary jumps in municipal taxes and charges can also support an application, as can new or higher costs for security services.
File first, collect later. A landlord who charges an above-guideline amount on his own say-so has served a defective increase, and the tenant can challenge it. Board processing times move, and no one can promise you a hearing date or an outcome, so start an L5 well before the money is needed and budget as if the guideline amount is all you will collect until an order says otherwise.
Capital work needs records. Keep the contracts. Keep the invoices and the proof of payment, and keep the dates the work was done, because the Board tests the spending against the rules for eligible capital expenditures.
The landlord owes the tenant interest on the rent deposit, paid yearly, at the guideline rate in effect when the interest comes due. For interest due in 2027, that rate is 1.9%. On a $2,000 deposit, that interest is $38.
Landlords miss this because no one sends them a bill for it. In practice the interest is often handled at the same time as the annual increase, when the deposit is topped up to match the new rent, and the two amounts are close in size at these guideline levels. Close is not equal. Do the arithmetic for your tenancy, record what was paid or credited, and keep the record with the lease.
That deposit is a rent deposit and nothing else. Ontario does not allow a damage deposit, a pet deposit, or a cleaning deposit on top of it, and a clause that asks for one does not become enforceable because a tenant signed it.
A defective notice does not take effect, and rent stays at the old lawful amount. Wrong form, short notice, an increase inside the 12-month window, and a percentage above the guideline without Board approval are the defects we see most often in Ottawa files that reach us after the fact.
The fix is unglamorous. Accept that the increase date is lost, serve a correct Form N1, and let a fresh 90 days run. Do not collect the higher amount in the meantime, and do not ask the tenant to backdate anything. If a tenant has already paid an increase under a defective notice, get advice from a paralegal or a lawyer before you decide how to unwind it, because the amounts and the dates decide the remedy.
A tenant who believes an increase is unlawful can apply to the Landlord and Tenant Board. That application is far easier to avoid than to answer.
First-time and accidental landlords. Run it every year, on time. Small annual steps are easier for a tenant to absorb than a catch-up jump you cannot legally make anyway.
Out-of-province and non-resident owners. The notice dates do not move because you are away. Someone in Ontario has to serve the Form N1 inside the window and hold the proof of service, and non-resident owners have a separate tax track to run as well, set out in our non-resident landlord tax guide.
New-build investors. Your unit can be exempt, which makes the first-occupancy date a document worth money. Keep the paperwork that proves it, and set the rent with the market in view, because an exempt increase a tenant rejects still ends in a vacancy.
Multi-door and small-plex owners. Stagger your records, not your standards. Each unit carries its own 12-month clock and its own deposit interest, and a spreadsheet that tracks the last increase date per unit pays for itself the first time it stops a defective notice.
Where the home sits changes none of this. A condo in Sandy Hill and a townhouse in Kanata follow the same provincial rule, and our Kanata property management page shows how that plays out in one Ottawa suburb.
A guideline increase on one unit, for a tenant already in place, is a task a careful owner can run alone. You need the last increase date, the current Form N1 from the Board, and a calendar entry 90 days ahead of your date. Budget half an hour. Do it at a desk, not from memory in a hallway conversation.
Hand it off when the file stops being simple. An above-guideline application, a disputed notice, an exempt unit where the first-occupancy date is unclear, or a portfolio where the increase dates have drifted apart all cost more to repair than to run properly the first time. That repair risk is the honest reason owners pay a manager, and our full property management service runs the annual cycle as part of the file, deposit interest included.
This guide states the general Ontario rule as published by the province in 2026. It cannot tell you the lawful rent for a specific unit, because that depends on the unit’s own history, on past notices, and on orders the Board has already made about the unit.
It also cannot price your unit. The guideline is a ceiling for an increase on a sitting tenant, not a reading of what an Ottawa home rents for today, and our Ottawa rent pricing guide covers that separate question. Care homes sit under rules this guide does not cover. So do student residences run by schools, along with rent-geared-to-income housing.
The 2027 guideline is 1.9%, worth $34.20 a month on a $1,800 rent and $47.50 on a $2,500 rent. Serve a correct Form N1 at least 90 days ahead, respect the 12-month clock, pay the deposit interest at the same rate, and leave above-guideline amounts to a Form L5 application. Owners who run that cycle every year keep the increase. Owners who improvise it lose the date, and the date, in this process, is the money every single time.
For units covered by the guideline, the maximum increase without Landlord and Tenant Board approval is 1.9% for increases taking effect in 2027. The province set the figure from the Ontario Consumer Price Index, and the Residential Tenancies Act, 2006 caps the guideline at 2.5%.
At least 90 days ahead. Give the notice in writing on Landlord and Tenant Board Form N1. The increase also cannot take effect until at least 12 months have passed since the tenancy began or since the last increase.
No. An unused guideline cannot be saved and added to a later year. A landlord who leaves rent unchanged for a year can still only take the current year’s guideline percentage when the next increase takes effect.
Units first occupied for residential purposes after November 15, 2018 are exempt from the guideline percentage. The 12-month rule and the 90-day written notice requirement still apply, and the Board’s notice form for an exempt unit is Form N2.
Interest is paid yearly at the guideline rate in effect when it comes due, which at the 2027 rate of 1.9% puts $38 of interest on a $2,000 rent deposit for the year.
The increase does not take effect and rent stays at the old lawful amount. The landlord has to serve a correct Form N1 and let a new 90-day period run, and a tenant can apply to the Landlord and Tenant Board over an unlawful increase.
Raising the rent on an Ottawa rental this year?
For every unit we manage, we work out the lawful increase in dollars, serve the right form, N1 for guideline units or N2 for exempt ones, at least 90 days ahead, and credit the deposit interest the tenancy earns each year. The increase lands on the correct date, in the correct amount, with the paperwork to prove it.
Send us your current rent and the date of the last increase and we will tell you the exact 2027 figure your unit can take, and the latest date to serve the notice.
613-800-2523 · info@rentsetgo.ca
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This article is general information about Ontario rent increases, based on the Ontario residential rent increases page as updated June 23, 2026. It also rests on the Residential Tenancies Act, 2006. It is not legal advice. Guideline percentages change over time. Board forms and filing rules change too, so confirm the current form and figure before you serve a notice, and take a disputed increase or an above-guideline application to a licensed paralegal or a lawyer.
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