The Basics of Rent Increases in Toronto

Rent freeze for 2021

The Government of Ontario has passed legislation to freeze rent at 2020 levels. This means that rents will not increase in 2021 for the vast majority of rented units covered under the Residential Tenancies Act.

When can rent be increased?

Generally, the rent for a unit can be increased 12 months after:

  • the last rent increase, or

  • a tenant first moves in.

The landlord must give the tenant at least 90 days' notice before it takes effect. 

Note : A landlord may also increase the rent at any time if the landlord and the tenant agree that the landlord will add a new service or facility such as a parking space, air conditioner or storage locker.

Is there a limit to how much rent can be increased?

The landlord can increase rent by only a certain amount. There is a yearly guideline set by the government and it determines the maximum percentage a landlord may increase rent without approval of the Landlord & Tenant Board. By law, the rent increase guideline cannot exceed 2.5 per cent.

A sample calculation

Your current monthly rent is $1,000. The rent increase guideline for 2020, which applies to rent increases between January 1st to December 31st, is 2.2%. Therefore at your next rent increase, this is how it would be calculated:

  • an increase of 2.2% on $1,000 = $22.00

  • $1,000 + $22.00 = $1,022.00

The landlord could lawfully increase your rent payment up to $1,022.00 per month

Can the landlord increase rent higher than the guideline? 

Landlords can apply to the LTB for an increase above the guideline for any of the following reasons:

  1. Their municipal taxes have increased by more than the guideline plus 50 per cent. (For example, if the guideline is 2.2%, the taxes must have increased by more than 3.3%).

  2. They incurred operating costs related to security services.

  3. They incurred eligible capital expenditures.

 

Exceptions

This guideline does not apply to:

  • New buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018.

Have more questions about property management, leasing or real estate ? Ask our experts or follow us @clavispm

TenantsTrestin Yuen