Rental Increase Limit Remains the Same for 2025

For a third consecutive year, landlords of residential units in Ontario will be able to raise their tenants’ rent by 2.5% in 2025.

Tenants in ‘rent-controlled’ units faced the same increase in 2023 and, again, in 2024.

The Ontario government approved the maximum allowable increase in June.

While high, it is the lowest rate increase in the country and below the average inflation rate of 3.1%.

Rent increases are not mandatory — 2.5% is the most a landlord can raise rent for current tenants next year, without obtaining approval from the Landlord and Tenant Board (LTB), unless the residential unit was occupied for the first time after Nov. 15, 2018. In this case, a landlord can raise rent above the guideline, so long as proper notice is given.

Should a tenant move out, the landlord can choose to charge the next resident rent above the allowable guideline for 2025; the starting point for all rents, and subsequent rent increases, is reset when a unit turns over to a new tenant.

A landlord may only raise the rent if they give their tenant at least 90-days written notice using the correct form (typically a N1). In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase. If a tenant believes they have received an improper rent increase, they can apply to the LTB to request a correction.

The approved rent increase goes into effect January 1.