If a landlord in Ontario seeks a rent increase above the 2026 guideline of 2.1 percent, they must get approval from the Landlord and Tenant Board rather than rely on the guideline alone. The guideline for 2026 is 2.1 percent and the legislature caps the guideline at 2.5 percent. Common legal grounds for an above-guideline increase are extraordinary municipal tax hikes, major capital expenditures, or new or increased security services, and the LTB requires a formal application with detailed evidence. The immediate practical step for landlords and tenants is to download the correct LTB forms and assemble supporting documentation before proposing any effective date.

1. Confirm whether the unit is covered by the guideline

Start with the statute. The Residential Tenancies Act, 2006 sets out which private residential rental units are governed by the annual rent guideline and the above-guideline application process. Most rented houses, apartments, basement apartments and condominiums are covered. Units first occupied for residential purposes after November 15, 2018 are generally exempt, along with most new additions and most new basement apartments. Social housing and long-term care homes follow different rules under the Act.

Worked example. A landlord who converted an old garage into an apartment and first rented it in 2020 would likely be exempt from the guideline. By contrast, a downtown apartment first rented in 2015 would normally be covered.

Checklist for this step:

  • Confirm the unit's first-occupancy date.
  • Check whether the unit is part of social housing or a long-term care residence.
  • Refer to the Residential Tenancies Act, 2006 for statutory definitions.

2. Respect baseline timing and notice rules

The Act requires timing and notice regardless of whether an increase is ordinary or above-guideline. A landlord may impose a rent increase only if at least 12 months have passed since the last rent increase or since the tenancy began. The landlord must give written notice at least 90 days before the increase takes effect, using the proper notice forms available from the Landlord and Tenant Board.

A tenant who believes an increase was improper can dispute it at the LTB within 12 months after the amount was first charged.

Worked example. If a landlord last raised rent on January 1, 2025, the earliest lawful date for any further increase is January 1, 2026. To meet the 90-day requirement, the landlord would need to serve the tenant notice no later than October 3, 2025.

Checklist for this step:

  • Count 12 months from the last increase or the tenancy start date.
  • Serve the LTB notice form at least 90 days before the effective date.
  • Keep proof of delivery of the notice.

3. Identify the statutory grounds for an above-guideline increase

The Residential Tenancies Act, 2006 allows an above-guideline increase only for specific reasons. The principal grounds are unusually large increases in municipal taxes and charges, capital expenditures for significant renovations or replacements, and the provision or increase of security services. This Landlord and Tenant Board explains these grounds in its brochure, which describes what municipal items count and what counts as capital expenditure.

Worked example. A landlord whose municipal tax bill jumps dramatically, or who replaces an entire roof or installs a new security system, may have a statutory basis to ask the LTB for approval of an increase beyond the annual guideline.

Checklist for this step:

  • Decide which of the statutory grounds, if any, applies.
  • Review the LTB brochure to confirm qualifying items.
  • Plan the documentary evidence you will need for that ground.

4. Apply the test for when a municipal tax increase is "extraordinary"

The Landlord and Tenant Board treats a municipal tax and charge increase as extraordinary if it exceeds the current guideline plus 50 percent of the guideline. The guideline used is the calendar-year guideline in which the landlord’s first requested rent increase will take effect. For 2026, the guideline is 2.1 percent. That means an extraordinary municipal-tax increase would be any jump greater than 3.15 percent, since 2.1 percent plus half of 2.1 percent equals 3.15 percent.

Worked example. If a landlord’s municipal taxes rose 4 percent in the relevant year, that would pass the LTB’s extraordinary-tax test based on the 2026 guideline. The landlord could therefore consider an above-guideline application on that ground, subject to providing precise municipal bills and notices.

Mastheads

Checklist for this step:

  • Identify the calendar year of the planned first increase.
  • Use that year’s guideline to compute the 150 percent threshold.
  • Collect municipal tax bills and official notices to support the claim.

The LTB describes Capital expenditures as extraordinary or significant renovations, repairs, replacements or new additions to a building or individual units, not ordinary maintenance. The tribunal expects landlords to show the work was substantial, necessary and not routine before approving an above-guideline increase on this basis.

Worked example. Replacing a building-wide heating system or reroofing an entire structure would typically be treated as capital work. Replacing a single broken window would normally be ordinary maintenance and wouldn't justify an above-guideline increase.

Checklist for this step, based on tribunal guidance and practitioner commentary:

  • Prepare invoices, contracts and contractor reports.
  • Keep permits and engineering or municipal approvals, if applicable.
  • Assemble before-and-after photos and proof of necessity.

An above-guideline application must include tailored, detailed evidence. For a tax-based application, attach municipal tax bills, official notices and any correspondence with the municipality. For capital expenditures, include signed contracts, invoices, permits and contractor or engineer reports. And for security services, provide contracts or invoices showing the service change or increased cost. The Landlord and Tenant Board brochure and the tribunal’s website set out the procedural checklist and the specific forms you must complete.

Worked example. A landlord seeking a capital-based increase would include the contractor’s signed estimate, the final invoice, copies of building permits and photos showing the work done. The LTB will look for a paper trail that shows the expense was real and substantial.

Checklist for this step:

  • Download the AGI application form from the Landlord and Tenant Board website.
  • Attach municipal bills, contractor invoices, permits or security contracts as relevant.
  • Organize documents chronologically and include a clear index for the Board.

Landlords and tenants may avoid the Board by agreeing in writing to a higher rent. If a tenant consents to an above-guideline increase, the agreement must specify what the tenant receives in return and meet statutory form and content requirements. A tenant can't be forced to accept higher rent without Board approval. Practice guides advise that any agreement spell out the improvements or services provided, and that tenants seek independent advice before signing.

Worked example. A landlord offers to upgrade kitchen appliances and requests a higher rent. If the tenant agrees in writing and the agreement lists the exact upgrades, both parties can proceed without an LTB application, provided the paperwork meets statutory requirements.

Checklist for this step:

  • Draft a written agreement describing the benefit to the tenant.
  • Ensure the agreement follows the required statutory form and content.
  • Advise tenants to get independent legal or clinic advice before signing.

Tenants may contest an above-guideline increase at the Landlord and Tenant Board. They can also dispute an increase if they believe notice was improper or if the landlord charged the higher rent without approval. The statutory window to dispute a charged increase is 12 months from the date the increased amount was first charged. Tenant advocacy groups and community legal clinics recommend preserving evidence, requesting disclosure from the landlord, and seeking legal aid when responding to an AGI application at the Board.

Worked example. If a tenant begins paying a higher rent on March 1, 2026 and believes the landlord lacked approval, the tenant has until March 1, 2027 to file a dispute with the LTB challenging that charge.

Checklist for tenants:

  • Keep copies of rent receipts and any notices.
  • Request the landlord’s supporting documents through the Board process.
  • Contact a community legal clinic or tenant advocacy group for help.

Right now, the annual guideline is calculated from the Ontario Consumer Price Index using Statistics Canada data from June to May to set the guideline for the following year. The legislature caps the guideline at a maximum of 2.5 percent in order to limit one-time increases. This government provides sample calculations showing how to apply the percentage to a monthly rent. The Landlord and Tenant Board uses the appropriate calendar-year guideline in its threshold calculations for municipal tax increases.

Worked example. For a tenant paying $1,500 per month and the 2026 guideline of 2.1 percent, an ordinary guideline increase would raise the monthly rent by $31.50, to $1,531.50. If a landlord seeks an AGI because of a capital project or extraordinary taxes, the LTB will assess whether the claimed reason meets its statutory tests before approving anything above that guideline amount.

Checklist for this step:

  • Confirm which calendar-year guideline applies to your proposal.
  • Use the guideline percentage to calculate ordinary increases.
  • Compare municipal tax jumps to the 150 percent threshold when relevant.

Practical timing matters. Ordinary increases require 90 days’ written notice and at least 12 months between increases. An AGI application to the Landlord and Tenant Board should be prepared so that the evidence and notice align with the requested effective date. If a landlord charges higher rent without Board approval when approval is required, tenants can dispute that charge within 12 months of when the increased amount was first charged.

Worked example. A landlord who expects a tax notice in November should plan to gather the municipal documents, prepare the AGI application and serve any required notices well before the following spring, because the LTB will need the documentation tied to the effective date the landlord requests.

Final procedural checklist:

  • Download the correct notice or AGI application form from the Landlord and Tenant Board website.
  • Assemble all supporting documents before setting an effective date for the increase.
  • Ensure statutory timing rules, such as 90 days and 12 months, are respected.
  • Check whether the unit is covered by the Residential Tenancies Act, 2006 and note the November 15, 2018 exemption rules.
  • Remember the timing rules: at least 12 months between increases and 90 days’ written notice, as set out by the Landlord and Tenant Board.
  • Only three main grounds allow an above-guideline application: extraordinary municipal taxes, capital expenditures, and security services. The LTB brochure explains qualifying items.
  • For tax-based AGI, use the calendar-year guideline to compute the 150 percent threshold. For 2026 the guideline is 2.1 percent, so the threshold is 3.15 percent.
  • Download the AGI application and notice forms from the Landlord and Tenant Board website and assemble municipal bills, permits, invoices and contracts before filing.

Related Articles

Take the practical next step now: download the correct notice or above-guideline (AGI) application form from the Landlord and Tenant Board website and assemble the supporting documents that match your claimed ground. Remember the 2026 guideline is 2.1 percent, and the LTB will require clear municipal bills, permits, contractor invoices or security contracts before approving an above-guideline increase.

This article was created with AI assistance.