This guide is general information for educational purposes only. It is not legal, tax or financial advice. Speak with a qualified lawyer, accountant or tax professional about your situation.
Ontario rent control exemptions turn on first residential occupancy after November 15, 2018. Qualifying units still need 90-day notice for annual increases.
This is for Toronto owners, investors and buyers of newer condos and rental buildings asking one question: does rent control apply to my unit? Short answer: qualifying tenancies in buildings first occupied for residential purposes after November 15, 2018 are exempt from the annual rent increase guideline. The timing and notice rules still apply.
For clients closing on pre-construction units and families weighing a newer condo against an older one, I treat the exemption as a feature to verify. It is narrower than a construction-date label suggests, and the burden of proving it sits with the landlord.
What is the Ontario rent control exemption for 2018?
Here, "rent control" means Ontario's rent increase guideline. Generally, it limits a sitting tenant's annual increase without approval from the Landlord and Tenant Board (LTB), the tribunal that decides residential tenancy disputes. The RTA also permits certain agreed increases for improvements or added services.
In late 2018 the province added section 6.1 of the Residential Tenancies Act, 2006 (the RTA). It took effect on December 6, 2018. It switches off the guideline and related rules for rental units in buildings, and additions to buildings, where no part was occupied for residential purposes on or before November 15, 2018.
The LTB's own summary is clear: there is no limit on the amount of the increase for these units. The province's rent increase page says the same, listing new buildings, additions and most new basement apartments as exempt.
What does the exemption actually remove?
Section 6.1 disapplies a specific list of sections. In practical terms, for a qualifying unit:
- The annual guideline (2.1% for 2026 and 1.9% for 2027, per Ontario's published table) does not cap the increase.
- The LTB's above-guideline increase process becomes irrelevant, since there is no guideline to exceed.
- The rules that reduce rent when a building's municipal property taxes fall do not apply.
For context, the guideline itself is tied to Ontario's Consumer Price Index and, under the RTA, can never exceed 2.5% in a year.
Which units qualify for the exemption?
There are two routes in the statute.
New buildings and additions
The unit must be in a building where no part was occupied for residential purposes on or before November 15, 2018, or entirely within an addition that meets the same test. Note the wording: the test looks at the whole building, not your individual suite.
That matters for condos. A tower where the first residents moved in during October 2018 does not qualify, even if your specific unit sat empty until 2019. Occupation is also not the same as registration. I ask for evidence of actual residential occupancy, rather than relying on a registration date.
New units inside existing houses
A second route covers new suites, such as basement apartments, in detached, semi-detached or row houses. All of these must be true:
- The house contained no more than two residential units on or at any time before November 15, 2018.
- The suite has its own kitchen and bathroom, one or more entrances, a door at each entrance secured from inside, and at least one of those doors lockable from outside.
- It became a self-contained unit after November 15, 2018.
- Either the owner lived in another unit of the house when the suite was first occupied, or the suite occupies space that was unfinished immediately before it became self-contained, such as a basement or attic.
One timing trap
If a tenancy agreement for the unit was signed on or before November 15, 2018 (a pre-leased unit, for example), the exemption does not apply to that tenancy. A subsequent tenancy can qualify if the unit meets the exemption criteria.
What rules still apply to exempt units?
The process still matters. The RTA still applies to an exempt unit, apart from the provisions specifically excluded. The exemption is about the size of the increase, not the process or the tenant's security of tenure.
| Rule | Guideline-controlled unit | Exempt unit |
|---|---|---|
| Ordinary annual increase cap | Guideline (2.1% in 2026) | No cap |
| Time between ordinary annual increases | At least 12 months | At least 12 months |
| Written notice | 90 days, LTB form | 90 days, LTB form |
| Lease expiry | Rolls to month-to-month | Rolls to month-to-month |
| Eviction grounds (N12, N13) | Apply | Apply |
Notice and timing
An ordinary annual increase requires at least 90 days' written notice on an LTB-approved form; without it, the increase is void. At least 12 months must pass since the last increase or the tenancy began. The LTB's N1 instructions direct landlords to use Form N2 where the unit is exempt from the rules limiting the amount of an increase.
There are narrow exceptions to these timing and notice rules, including agreed charges for added services such as parking, and qualifying charges for a tenant's air conditioner where the landlord supplies electricity.
Lease expiry is not an exit
When a fixed-term lease ends and has not been renewed or lawfully terminated, the RTA deems it renewed as a monthly tenancy on the same terms. The tenant can stay. An owner cannot use the end of a lease to reset the rent or end the tenancy.
N12: ending a tenancy for landlord or purchaser use
I distinguish landlord use from purchaser use before planning vacant possession. Under section 48, the landlord must be an individual and the unit owned at least partly by an individual. The landlord, an eligible family member or caregiver must in good faith require residential occupation for at least one year.
For purchaser use under section 49, the landlord must have an agreement of purchase and sale. This route covers complexes with no more than three residential units and individual condominium units, subject to statutory restrictions. The purchaser, an eligible family member or caregiver must have a good-faith residential-use intention; section 49 does not specify a one-year minimum.
Both routes require at least 60 days' notice. The termination date must end a rental period or, for a fixed-term tenancy, be the end of the term. I use the September 2026 N12 form to check these requirements. A notice alone does not authorize an eviction.
For landlord-use notices served on or after September 21, 2026, at least 120 days' notice removes the requirement to pay compensation or offer another unit. With 60 to 119 days' notice, the landlord must pay one month's rent by the termination date or offer another rental unit acceptable to the tenant.
For purchaser-use notices, the landlord serving the notice must still pay one month's rent by the termination date or offer another rental unit acceptable to the tenant. Giving 120 days or more does not remove that obligation. I check the LTB's September 21 update alongside RTA sections 48.1, 49.1 and 55.1.
The new landlord-use bad-faith presumption also matters. If the tenant leaves on or before the N12 termination date, the intended occupant has 60 days after that date to move in. If the tenant leaves later, the period runs from their departure. Failure to occupy within that period creates a rebuttable presumption on a T5 application.
I would check the occupancy plan before serving notice. For T5 applications made on or after September 21, 2026, this presumption applies to landlord use, not purchaser use, under O. Reg. 240/26 and RTA section 57(6.1).
How much difference does it make in a worked example?
Take a hypothetical sitting tenant paying $4,500 a month, with increases taking effect in 2026 and then 2027. The guideline figures are Ontario's published rates. The 5% figure for the exempt unit is purely illustrative; I would weigh market conditions and the risk of losing a tenant before choosing an increase.
| Step | Guideline unit | Exempt unit (5% illustration) |
|---|---|---|
| Starting rent | $4,500.00 | $4,500.00 |
| Increase in 2026 | 2.1%: $4,594.50 | 5%: $4,725.00 |
| Increase in 2027 | 1.9%: $4,681.80 | 5%: $4,961.25 |
Over two increases the gap is roughly $280 a month. That is meaningful, but I would not underwrite an exempt unit on the assumption of large annual increases. I would weigh vacancy risk alongside rent growth, as I discuss in The Rent Decline Paradox.
How do I verify a unit's first occupancy date?
If there is ever a dispute at the LTB, the statute puts the onus on the landlord to prove the exemption. Ontario suggests landlords note the exemption as an additional term in section 15 of the lease and keep supporting records. My checklist:
- Occupancy and building permits. Ontario lists building permits, occupancy permits and plans as useful records. In Toronto, the City's permit status search can help locate available records. Ask the City about records that are not shown in the online search.
- New home warranty documents. Ontario lists new home warranty documents as useful exemption records. I would check them alongside evidence of the building's first actual residential occupancy.
- Builder and condo corporation records. Ask for the date the first units in the building were occupied, not your unit's date.
- For basement suites: contractor invoices, permits and before-and-after photos, which Ontario specifically mentions.
When I act on a purchase, I ask for these documents before firm. If the seller cannot evidence the date, I price the unit as if it were rent controlled.
What this means for you
Luxury buyer. If you are buying to live in, I would still verify the exemption for a future resale. For a tenanted unit, I would check purchaser-use eligibility and allow at least 60 days' notice ending a rental period or fixed term.
The landlord serving a purchaser-use N12 must pay one month's rent by the termination date or offer another rental unit acceptable to the tenant. The new landlord-use exemption for at least 120 days' notice does not apply to purchaser use. I would have the notice and possession timeline reviewed before committing.
Investor. Treat the exemption as flexibility, not a growth assumption. Verify the building's first occupancy date yourself, and do not rely on a listing remark. For a continuing tenancy, check when its tenancy agreement was entered into. My notes on pre-construction and assignments in 2026 cover the wider context.
Rental owner. Note the exemption in section 15 of the standard lease, keep the evidence in one file, and serve every increase on the correct LTB form. For purpose-built rental, the exemption shapes long-term rent growth, which I discussed in The Case for Multifamily. Your real estate lawyer or paralegal should review any notice before it is served.
Frequently asked questions
Does the exemption apply to every condo built after 2018?
The building route requires that no part was occupied for residential purposes on or before November 15, 2018. The tenancy-agreement exception also matters. Completion or registration dates alone do not settle it.
Can a landlord raise rent more than once a year on an exempt unit?
For ordinary annual increases, no. The 12-month rule and at least 90 days' written notice on an LTB-approved form still apply. Certain added-service and air-conditioning charges have separate rules.
Does the exemption let a landlord end a tenancy at the end of the lease?
No. The tenancy continues month-to-month. I would check for a valid RTA ground and the correct process before planning possession. A qualifying N12 for landlord or purchaser use requires at least 60 days' notice ending a rental period or fixed term; a notice alone does not authorize eviction.
Does 120 days' N12 notice remove compensation for every own-use notice?
No. For landlord-use notices served on or after September 21, 2026, at least 120 days' notice removes compensation and the alternative-unit requirement. With 60 to 119 days, the landlord must pay one month's rent by termination or offer an acceptable rental unit. Purchaser-use notices retain that obligation even with 120 days or more.
Who has to prove the unit is exempt?
The landlord. In an LTB application where the exemption is at issue, the RTA places the onus on the landlord.
Sources
- Residential Tenancies Act, 2006, S.O. 2006, c. 17 (Government of Ontario, e-Laws)
- Residential rent increases (Government of Ontario, Ministry of Municipal Affairs and Housing)
- Rent control changes to the Residential Tenancies Act (Tribunals Ontario, Landlord and Tenant Board)
- LTB forms and instructions (N1, N2) (Tribunals Ontario, Landlord and Tenant Board)
- Legislative changes effective September 21, 2026 (Tribunals Ontario, Landlord and Tenant Board; published September 21, 2026)
- N12 notice and checklist, September 2026 version (Landlord and Tenant Board)
- Interpretation Guideline 12: personal-use evictions and bad faith (Landlord and Tenant Board; updated September 2026)
- O. Reg. 240/26: Prescribed Period of Time (Government of Ontario, e-Laws; effective September 21, 2026)
- Building permit application and inspection status (City of Toronto)