Ontario Rent Increase Guideline for 2025 – What You Need to Know
If you're a landlord or tenant in Ontario, staying up to date with the annual rent increase guideline is key to avoiding surprises. For 2025, the allowable rent increase is capped at 2.5% – a number that impacts the majority of rental properties across the province.
What Does This Mean?
The 2.5% cap applies to most residential properties built and first occupied before November 15, 2018. This guideline helps create stability for tenants while ensuring landlords can adjust for inflation and rising costs.
How Does It Work?
Landlords looking to increase rent must follow a few important rules:
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Notice Period: Landlords are required to provide tenants with at least 90 days' written notice before raising rent. This must be done using the official N1 rent increase form.
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Annual Limit: Rent can only be increased once every 12 months. Even if inflation rises, landlords cannot exceed the 2.5% cap without applying for an exception.
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Exceptions: If landlords wish to raise rent by more than 2.5%, they must apply to the Landlord and Tenant Board (LTB) using an N10 form for approval.
Why Is This Important?
This cap offers tenants protection from unexpected rent hikes that could lead to financial stress. At the same time, it ensures landlords can account for inflation without overburdening renters. Interestingly, Ontario's rent cap for 2025 is one of the lowest in the country – lower than the current inflation rate of 3.1%.
How Is the Cap Determined?
The annual rent increase guideline is tied to the Ontario Consumer Price Index (CPI) – a measurement of inflation provided by Statistics Canada. This index reflects the cost of goods and services, directly influencing the allowable rent increase.
Key Takeaways for 2025
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2.5% maximum allowable rent increase
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Applies to properties built before November 15, 2018
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90 days' notice required (N1 form)
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Rent can be raised once every 12 months
At D'Amico Real Estate, we know how important it is to stay on top of these regulations – whether you're managing multiple properties or renting your first place. If you have questions about how the 2025 rent increase affects you, feel free to reach out. We're here to help you navigate the process smoothly.
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