Investment Property in Toronto: What Ontario and the City Require of a Landlord

Two sets of rules before any spreadsheet

We do not project returns, rents or prices on this page. We set out the rules that any honest set of numbers has to respect. Confirm how each applies to your purchase with a lawyer, a licensed paralegal or an accountant.

Rent increases under the Residential Tenancies Act

Ontario publishes a rent increase guideline each year:

Year	Guideline
2025	2.5 percent
2026	2.1 percent
2027	1.9 percent

The guideline is the maximum most landlords can raise rent without the Landlord and Tenant Board’s approval. A landlord may apply to the Board to go above it in certain circumstances. Increases are allowed only once at least 12 months have passed since the last increase or the start of the tenancy and the tenant must get written notice in the proper form at least 90 days before the increase takes effect.

Over a long tenancy, capped increases can leave a unit’s rent below what a new tenant would pay. That affects your income and can affect what an investor buyer will pay if you sell with the tenant in place.

The November 15, 2018 exemption

Ontario exempts from the guideline units that were occupied for the first time for residential purposes after November 15, 2018. That includes new buildings, additions to existing buildings and most new basement apartments.

Two Toronto condos in similar buildings can fall on opposite sides of this date. Ask for evidence of the first occupancy date before you buy and keep in mind that the 12 month rule and the 90 day notice still apply to exempt units.

The standard lease and the Landlord and Tenant Board

Ontario’s standard lease is required for most residential tenancy agreements signed on or after April 30, 2018.

If a landlord does not provide it, the tenant can request it in writing and the landlord has 21 days. If it does not arrive, Ontario says the tenant may withhold one month’s rent and keep it if 30 more days pass without the lease. A lease cannot take away a right or responsibility under the Residential Tenancies Act.

Disputes go to the Landlord and Tenant Board, part of Tribunals Ontario, which holds mediations and hearings and decides applications, including those to end a tenancy.

Selling or moving in: ending a tenancy for own use

Where the landlord, a family member, a caregiver or a purchaser will live in the unit, the Residential Tenancies Act sets out a process to end the tenancy.

In those cases Ontario says the landlord must give the tenant the equivalent of one month’s rent or offer another unit. If the landlord gives 120 days notice or more, that compensation is not required. Have a lawyer or licensed paralegal prepare the notices. If you plan to sell a tenanted unit later, our sellers page and home valuation are the place to start.

City of Toronto licences for landlords

Multi-tenant houses. The City defines a multi-tenant or rooming house as premises with four or more rooms occupied by people who do not live together as a single housekeeping unit. Since March 31, 2024, operators across Toronto must hold a licence and keep property maintenance plans covering tenant service requests, pest management and waste. Renting rooms to separate tenants in a house you buy can bring it inside this regime.

Rental Renovation Licence. When a landlord serves an N13 notice to end a tenancy for repairs or renovations that need the unit vacant, the City requires an application for a Rental Renovation Licence within seven days. The application needs a report from a qualified person licensed by the Ontario Association of Architects or Professional Engineers Ontario and the necessary building permits. The bylaw sets compensation for tenants who return and for those who do not. Enforcement began on July 31, 2025.

RentSafeTO. The City’s apartment building standards programme applies to apartment buildings with three or more storeys and ten or more units.

The Vacant Home Tax

Every residential property owner in Toronto must declare its occupancy status each year. The City sets April 30 as the deadline and presumes a property vacant if no declaration arrives.

A property left unoccupied for six months or more in the taxation year may owe the tax, which has been 3 percent of current value assessment since the 2024 taxation year. Tenants count as occupants if they have written agreements for terms of at least 30 days, adding up to at least six months in the year.

Ordinary property tax applies too. The City’s 2026 residential rate is 0.767311 percent of assessed value and our post on Toronto property tax explains the bill.

Taxes on foreign buyers

Ontario’s non-resident speculation tax is 25 percent and applies to residential property anywhere in the province bought by foreign nationals, foreign corporations or taxable trustees. It covers homes with one to six single family residences, including condo units. Where any one buyer on title is a foreign entity, Ontario applies it to 100 percent of the value, not that person’s share.

The City of Toronto adds a municipal non-resident speculation tax of 10 percent for foreign buyers of certain residential properties, effective January 1, 2025, on top of both land transfer taxes. The City says there is no grandfathering for agreements signed before that date and that its tax is due on registration. Our land transfer tax calculator for Toronto shows the provincial and municipal land transfer taxes that apply to every buyer.

What the market figures show

In August 2026 TRREB recorded 1,767 sales in the City of Toronto, of which 885 were condo apartments, at a median of $550,000. For April to June 2026, all property type medians in several communities sat close to that figure: Islington-City Centre West at $594,500, Waterfront Communities C8 at $597,500, Waterfront Communities C1 at $610,000, Bayview Village at $622,500 and Mount Pleasant West at $630,000.

These are past sale prices, not a guide to future value. Our guides to the Downtown Waterfront, Yonge and Eglinton, Bayview Village and Islington Village describe each area. Before buying any condo to rent, have your lawyer read the status certificate, since a special assessment is the owner’s cost, not the tenant’s.

How we work with investors

We start from the rules above and the costs you can document: price, both land transfer taxes, financing, property tax, condo fees, insurance, repairs and vacancy. We will tell you when a property does not work as a rental at the asking price. We do not forecast appreciation or rents.

Tax on rental income and on any gain when you sell depends on your circumstances, so speak to an accountant. If you want a second view on a specific Toronto property, contact us with the listing and any existing lease.