Ontario Maintains 25 Rent Increase Guideline for 2025

Ontario has announced that the annual rent increase guideline for 2025 will remain at 2.5 percent, marking it as the lowest rate across the country and below the average inflation rate of 3.1 percent. The rent increase guideline serves as the maximum allowable amount that landlords can increase rent for most tenants without seeking approval from the Landlord and Tenant Board.

This guideline is determined based on Ontario’s Consumer Price Index, which is a measure of inflation calculated by Statistics Canada using data reflecting economic conditions over the past year. The cap of 2.5 percent under the Residential Tenancies Act aims to shield tenants from potential spikes in rent due to rising interest rates. Without this cap, the rate of inflation in 2025 would have necessitated a 3.1 percent increase.

It’s important to note that rent increases are not automatic or mandatory. Landlords must provide tenants with at least 90 days written notice using the appropriate form. Additionally, there must have been at least 12 months since the beginning of the tenancy or since the last rent increase for a new increase to be considered valid. Tenants who believe they have received an unjustified rent increase can apply to the Landlord and Tenant Board to request a review and potential correction.

In recent years, Ontario has experienced the highest levels of housing and rental housing starts in over three decades, underscoring the dynamic nature of its rental market.