Above Guideline Rent Increase Ontario — How to Apply (2026)
Ontario's rent increase guideline limits how much landlords can raise rent each year. For 2026, the guideline is 2.5%. But what if your costs have increased by more than that? The Residential Tenancies Act (RTA) allows landlords to apply for an Above Guideline Increase (AGI) through the Landlord and Tenant Board, capped at 3% per year above the guideline. Here is how the process works, what qualifies, and what to expect in 2026.
Quick Answers
- 2026 rent increase guideline: 2.5%
- Maximum AGI: 3% per year above guideline, for up to 3 consecutive years (9% total above guideline)
- Filing fee: $208 + $12 per unit (L5 application)
- Eligible costs: Capital expenditures, municipal tax increases, utility increases, security services
- Processing time: 12-18 months from filing to decision
What Is an Above Guideline Increase?
An AGI allows landlords to raise rent beyond the annual guideline amount. Under section 126 of the RTA, landlords can apply for an AGI based on three categories of extraordinary costs.
Note that units first occupied after November 15, 2018 are exempt from rent control entirely, meaning AGIs are not necessary — the landlord can increase rent by any amount with proper 90-day notice (N1 or N2 form).
What Expenses Qualify for an AGI?
| Expense Category | Examples | AGI Type | Duration |
|---|---|---|---|
| Capital expenditures | Roof replacement, elevator modernization, boiler replacement, window replacement, major plumbing/electrical upgrades | Temporary (amortized over useful life) | Expires when amortized |
| Municipal tax increases | Property tax assessment increases above the guideline threshold | Permanent | Becomes part of base rent |
| Utility cost increases | Significant increases in hydro, gas, water costs paid by landlord | Permanent | Becomes part of base rent |
| Security services | New security guards, camera systems, access control | Permanent | Becomes part of base rent |
What Does NOT Qualify?
Routine maintenance and repairs do not qualify. The LTB distinguishes between capital expenditures (which may support an AGI) and ordinary maintenance (which does not). Capital expenditures must extend the useful life of something by at least 10 years, replace a major building component rather than simply repair it, and represent a significant, non-recurring cost. Patching drywall, fixing leaky faucets, repainting hallways, and replacing individual appliances are ordinary maintenance — not capital expenditures.
How to Apply for an AGI: Step by Step
Step 1: Gather Documentation
Compile invoices and receipts for all capital expenditures, contractor quotes and contracts, municipal tax assessments showing increases, utility bills demonstrating cost increases, proof of payment for all claimed expenses, and engineering reports or building condition assessments if applicable.
Step 2: File the L5 Application
Submit the L5 Application to the LTB. The filing fee is $208 plus $12 per rental unit affected. For a 50-unit building, this amounts to $808.
Step 3: Serve All Affected Tenants
Serve a copy of the application and supporting documentation to every tenant affected by the proposed increase. This gives tenants the opportunity to review and prepare objections.
Step 4: Attend the LTB Hearing
The LTB will schedule a hearing where both the landlord and tenants present their positions. Tenants commonly challenge AGIs by arguing the expenditure was ordinary maintenance, disputing the costs claimed, or raising unaddressed maintenance issues in the building.
AGI Limits and Caps
The maximum above-guideline increase is 3% per year above the guideline, for a maximum of 3 consecutive years. So the total AGI cannot exceed 9% above the guideline over 3 years. With the 2026 guideline of 2.5%, the maximum total increase in year one would be 5.5% (2.5% guideline + 3% AGI).
How Long Does the AGI Process Take?
AGI applications are among the slowest at the LTB, typically taking 12 to 18 months from filing to decision. This is due to the complexity of the hearings, the volume of documentation required, tenant challenges, and the LTB's general backlog of 53,000+ cases. The increased adjudicator count under Bill 60 (133 total) may gradually improve processing times, but AGI applications remain at the lower end of the priority spectrum.
Common Mistakes to Avoid
- Claiming ordinary maintenance as capital expenditure: The LTB will reject routine repairs. Focus on genuine capital improvements that extend useful life by 10+ years.
- Poor documentation: Keep detailed records — invoices, contracts, before/after photos, engineering reports. The burden of proof is on the landlord.
- Ignoring existing maintenance issues: Tenants will raise unaddressed repairs as a counter-argument. Fix outstanding maintenance issues before filing.
- Not budgeting for the filing fee: At $12 per unit, the filing fee for large buildings is substantial.
- Underestimating the timeline: Plan for 12-18 months. Do not assume a quick resolution.
Our LTB application team helps landlords across Toronto, Mississauga, and all of Ontario prepare and file AGI applications with the documentation needed to succeed.
Frequently Asked Questions
Sources
- Residential Tenancies Act, 2006 — Section 126
- Landlord and Tenant Board — L5 Application
- Ontario — Rent Increase Guideline
- Bill 60 — Protecting Tenants and Strengthening Community Housing Act, 2024
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- Cost of Filing With the Landlord Tenant Board
- LTB Hearing Wait Times Ontario 2026
- Landlord Rights Ontario
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