If you own a rental in Ontario or you rent one, the number to know for next year is 1.9%.

Ontario has set the 2027 rent increase guideline at 1.9%, down from 2.1% in 2026. It applies to most rent-controlled units for increases that take effect on or after January 1, 2027. Anything taking effect in 2026 still uses the 2.1% cap. The figure appears on Ontario's official residential rent increases pages, updated June 23, 2026. Ontario.ca residential rent increases OntarioLandlord 2027 guideline guide

That 0.2 point drop does not sound like much. On real rents it adds up, and the timing rule around it catches more landlords than the percentage does.

What 1.9% means on your rent

The guideline is the most a landlord can raise rent on a rent-controlled unit in 12 months without approval from the Landlord and Tenant Board first.

At 1.9%:

  • $1,800 a month becomes $1,834.20, up $34.20
  • $2,000 a month becomes $2,038.00, up $38.00
  • $2,400 a month becomes $2,445.60, up $45.60
  • $2,500 a month becomes $2,547.50, up $47.50

On that $2,500 example the increase is $570 over a full year. For a small landlord, missing or mis-serving an increase is not a rounding error.

Recent guideline history, from the province's published figures City of Toronto guideline table:

  • 2027: 1.9%
  • 2026: 2.1%
  • 2025: 2.5%
  • 2024: 2.5%
  • 2023: 2.5%
  • 2022: 1.2%

That is two straight years of cooling after three years pinned at the 2.5% ceiling.

How the number gets set

The guideline tracks the Ontario Consumer Price Index, averaged over the 12 months from June of the prior year to May of the current year. The 2027 figure reflects Ontario CPI from June 2025 to May 2026. The Residential Tenancies Act caps it at 2.5% even when inflation runs hotter, so 1.9% sits comfortably under the ceiling. Landlord's Self-Help Centre annual guideline

Costs have not cooled at the same pace. Insurance, property tax, and mortgage renewals are still climbing for a lot of small landlords while the allowed increase shrinks. Nobody is pretending 1.9% keeps up with that. It is just the legal ceiling for most units.

The deadline that matters

A rent increase is not automatic. You need at least 90 days written notice on Form N1, and rent can only go up once every 12 months for the same tenant, on the first day of a rental period.

For an increase effective January 1, 2027, the N1 had to reach the tenant by October 3, 2026 at the latest. That date has now passed. If you missed it, you have not lost the increase, but you cannot backdate it to January 1. Serve now and the effective date moves forward to preserve the full 90 days.

Serving late does not shrink the increase. It pushes the whole cycle, and since you only get one increase in any 12 months, a missed January window can ripple into the year after. Mail adds deemed-service days, so serving early or in person is always safer.

Who the guideline does not cover

The cap does not apply to every unit.

Units first occupied for residential purposes after November 15, 2018 are generally exempt from the guideline. First occupied as a residence is what counts, not when you bought the place or signed your first lease. Newer condos and newly created basement units often fall here. If you rely on the exemption, keep the paperwork that proves the occupancy date.

Rent on a vacant unit between tenancies is not regulated either. When a tenant moves out, the next rent is set by the market.

To go above 1.9% on a rent-controlled unit you need an approved Above Guideline Increase from the LTB, applied for on Form L5. That is a formal application with a hearing, not something settled by a note under the door.

One other rule still trips people up: there are no security deposits in Ontario. The only deposit allowed is last month's rent, applied to the final month, plus a refundable key deposit capped at the actual cost of replacing the key or fob. Anything beyond that is not permitted.

What to do next

Landlords: confirm 12 months have passed since the last increase, calculate 1.9% on the current lawful rent without rounding up, and serve the N1 with time to spare on the current form. If your unit is exempt, you still owe 90 days notice. Keep a dated copy of the N1 and a note of how you served it.

Tenants: if an N1 lands for 2027, check the 12-month gap, the 90 days notice, and whether the math stays at or under 1.9% for a rent-controlled unit. If the numbers are off, pay the lawful amount, keep your receipts, and put the disagreement in writing.

Both sides are better off with a clean record. Landlords who can show the N1, the dates, and the payment history have nothing to scramble for at the Board. Tenants who can show what they paid and when are in a stronger position if anything is disputed. LIVIO keeps that proof automatically, receipts for every payment and a history that follows the tenant to the next application.

Sources: Ontario.ca Residential Rent Increases; OntarioLandlord Guideline 2027; Landlord's Self-Help Centre; City of Toronto RIG table. Verified Oct 8, 2026.