Ontario holds annual rent cap at 2.5 per cent

Ontario’s annual rent increase cap will remain at 2.5 percent for the next year.

The provincial government made the announcement on Friday, saying the capped rate is currently the lowest in the country and below the average inflation rate of 3.1 per cent.

“Under the Residential Tenancies Act, the guideline is capped at 2.5 per cent to help protect tenants from rising interest rates that would result in higher rent,” the province said. “Without the cap, the recent rate of inflation would have resulted in an increase of 3.1 per cent in 2025.”

The rent increase cap is the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board. Rent control applies to units that have been occupied for residential purposes before Nov. 15, 2018.

For much of the pandemic, there was a rent increase freeze. The province increased the rate to 1.2 per cent in 2022, and further increased it to 2.5 per cent in 2023. Since, then the cap has been stagnant.