The government of Ontario just announced the maximum rent increase landlords can apply for the year 2023. It is capped at 2.5 % and the government cites the rising inflation to cap the increase well below the Consumer Price Index (CPI) which according to Statistics Canada rose 6.8% on a year-over-year basis in April 2022.
This rent increase guidelines applies to properties first time residential properties first time occupied before November 15, 2018. Those built after that date are not rent controlled. Landlords can increase the rent year-to-year to whatever they want. Landlords must however, wait 12 months before they can request a new increase.
This will put an additional burden on Solo landlords already suffering with unpaid rent due to the LTB delays and will likely have an adverse effect to rental costs said small landlords who are facing financial hardship as they have to maintain property even the tenant is not paying rent.
Here is the official announcement from the Ministry of Municipal Affairs and Housing
Ontario’s rent increase guideline for 2023 is 2.5 per cent, below current rates of inflation. The rent increase guideline is the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board.
The guideline is based on Ontario’s Consumer Price Index, a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year. Due to recent inflation, this would result in a 2023 guideline of 5.3 per cent, however the guideline is capped to help protect tenants from significant rent increases.
“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,” said Steve Clark, Minister of Municipal Affairs and Housing. “We continue to look for ways to make homes more attainable for hardworking Ontarians, while making it easier to build more houses and rental units to address the ongoing supply crisis.”
The guideline applies to the vast majority – approximately 1.4 million – of rental households covered by the Residential Tenancies Act. It does not apply to rental units occupied for the first time after November 15, 2018, vacant residential units, community housing, long-term care homes or commercial properties.
Rent increases are not automatic or mandatory. Landlords may only raise rent if they gave tenants at least 90 days’ written notice using the correct form. 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 Landlord and Tenant Board to request a correction.
