Next year, Ontario landlords will be able to substantially hike rents as the market continues to recover from the pandemic rent freeze while battling rising inflation. 

Each year, the Landlord and Tenant Board of Ontario (LTB) issues rent increase guidelines which set out the maximum amount landlords can raise rents without LTB approval. The province recently announced that figure would more than double in 2023, reaching 2.5% – Ontario’s highest rental increase in a decade.

The move follows several years of uncertainty for GTA landlords who were able to increase rents by 1.2% this year after a year-long freeze. Rent increase guidelines are based on the Ontario Consumer Price Index which tracks inflation. 

Announcing the 2023 rates, Steve Clark, Minister of Municipal Affairs and Housing said: “As Ontario families face the rising cost of living, our government is providing stability and predictability to the vast majority of tenants by capping the rent increase guideline below inflation at 2.5 per cent.”

What does this mean for landlords?

Rent increases are not automatic or mandatory so it’s up to landlords if they want to take advantage of the 2.5% hike. But with many struggling to recoup lost rental income after the freeze, it’s unlikely they’ll miss the opportunity to up their earnings.

The usual requirements apply – landlords must give their tenants at least 90 days notice, serving them with the appropriate form (this is generally an N1: Notice of Rent Increase), and at least 12 months must have passed since the first day of the tenancy or the last rent increase. 

For example, if your tenant signed their lease on February 1, 2021, paying a monthly rent of $1,000, you can up that rent to $1,025 on February 1, 2022 (provided you’ve given your tenant the required 90 days notice in advance).

If that’s not sufficient, there’s always the option of applying to the LTB for an above guideline rent increase. These are issued in specific circumstances such as when a landlord has significantly invested in their property and wants to recoup some of that expenditure.

If you’re unsure of your rights and responsibilities as a GTA landlord, talk to the experienced and knowledgeable team at Highgate Property Investments. We’ve been working with landlords for over 30 years, offering tenant management, maintenance, property management, and more. Contact us today for stress-free property ownership!