The Ontario government is dropping a little more change into the pockets of real estate investors. Landlords have been given permission to increase their tenant’s rent by a maximum of 2.2% without approval from the Landlord and Tenant Board, starting January 1st 2020.
This announcement came with the release of new rent increase guidelines set forth by the provincial government every year. The guideline is calculated with the Ontario Consumer Price Index, a tool Statistics Canada uses to measure inflation and economic conditions.
Typically, this extra income is used to offset increased costs in property tax, utilities and insurance – but if all else remains equal, landlords will earn a higher profit on their rental units. A landlord is allowed to apply rent increases every 12 months, or at the time of a new tenant moving in. Existing tenants must be provided with a notice 90 days prior to the effective date.
Ontario has not seen a rent increase this high since 2013 at 2.5%; in the past two years rent increase remained at a steady 1.8%. The Ontario government website states that the guideline does not apply to new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time after November 15, 2018.