Above-Guideline Rent Increases in Ontario: What Landlords Need to Know
The rent increase guideline for 2027 is 1.9%. If major repairs or rising costs mean that isn’t enough, a landlord can ask the LTB for an above-guideline increase. Here is when you can apply, how much more you can get, and the deadlines that matter.
Key points
- You can apply on three grounds: an extraordinary increase in municipal taxes and charges, eligible capital expenditures, or certain security costs.
- Capital and security increases are capped at 3% above the guideline per year, with any excess spread over the next two years.
- File at least 90 days before the first increase is to take effect.
- Units first occupied after November 15, 2018 are exempt from the guideline and can’t use this process.
An above-guideline increase, or AGI, is an LTB order that lets you raise rent by more than the annual guideline. You apply on an L5 application. Tenants don’t have to pay the higher amount unless the Board approves it.
What an AGI is
The guideline caps most annual increases: 2.1% for 2026 and 1.9% for 2027. An AGI recognizes that some costs go beyond what the guideline covers, such as a new roof or a sharp rise in property taxes.
The three grounds
| Ground | What it covers |
|---|---|
| Municipal taxes and charges | An extraordinary increase, meaning more than the guideline plus 50% of the guideline |
| Eligible capital expenditures | Major repairs, replacements or new additions, such as roofs, windows, boilers or elevators |
| Security services | Operating costs for security provided by people who aren’t your employees |
Capital work on a unit doesn’t count toward that unit if a new tenant moved in after the work was finished.
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Book a free 20-minute call →How much more you can charge
The part of the increase from capital expenditures and security costs is capped at 3% above the guideline in any year. If the Board justifies more than that, the extra can be taken in each of the next two 12-month periods, so up to three years in total. Increases based on municipal taxes aren’t subject to that cap.
Applying
- Gather invoices, contracts and proof of payment for the work or costs.
- File the L5 at least 90 days before the date of the first increase.
- Serve tenants with the application and notice of hearing as the LTB directs.
- Still give each tenant a proper 90-day notice of rent increase.
- Attend the hearing and prove your costs.
After the order
Since July 1, 2026, if the LTB directs you to serve the order on tenants, you have 7 days from the order date, and must file the certificate of service within 5 days of serving it. For capital expenditures, the order also sets a future date when the rent must come back down by the capital portion, for tenants who are still living there.
Frequently asked questions
What is an above-guideline increase?
An LTB order allowing a landlord to raise rent by more than the annual guideline, based on certain costs.
How much above the guideline can I go?
For capital and security costs, up to 3% above the guideline per year, with any excess over the next two years. Municipal tax increases aren’t capped that way.
When do I have to apply?
At least 90 days before the first increase is to take effect.
Can I use an AGI for a unit built after 2018?
No. Units first occupied after November 15, 2018 are exempt from the guideline and this process.
Does the rent ever go back down?
Yes. For capital expenditures, the order sets a date when the capital portion must be removed for tenants still living there.
About Bita Di Lisi
Bita is the lead paralegal at Stonegate Legal Services and is licensed by the Law Society of Ontario. She represents Ontario landlords at the Landlord and Tenant Board and teaches landlords and investors about notices, LTB timelines and the mistakes that cost months.
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