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Usually not. In Ontario, a genuinely new purpose-built rental building is generally exempt from the annual rent-increase guideline if it was first occupied for residential purposes after November 15, 2018. Buildings, additions or qualifying converted spaces first occupied on or before that date generally remain subject to the guideline.
The legal test is not whether a developer calls a project “purpose-built.” It is the first residential occupancy of the building or addition, the tenancy-agreement date and the type of rent issue involved. The landlord must prove the exemption if a tenant disputes it.
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Ontario’s rent-control exemption is based on a specific date: November 15, 2018. Under the Government of Ontario’s Residential rent increases guidance, “new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018 are exempt from rent control.” Section 6.1(2) of the consolidated Residential Tenancies Act, 2006 uses the same basic test: the listed rent provisions do not apply when no part of the building or addition was occupied for residential purposes on or before November 15, 2018.
That creates two broad categories:
| First residential occupancy | General result |
|---|---|
| On or before November 15, 2018 | The unit is generally covered by Ontario’s annual rent-increase guideline. |
| After November 15, 2018 | The unit is generally exempt from the annual guideline, subject to statutory exceptions and transition rules. |
A building occupied exactly on November 15, 2018 falls on the covered side of the cutoff because the statute refers to occupancy “on or before” that date. A building first occupied on November 16, 2018 or later generally falls on the exempt side, assuming the other statutory conditions are met.
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Why the “purpose-built” label is not decisive
Purpose-built rental usually describes a building designed and constructed to operate as rental housing rather than condominiums later rented by individual owners. That description is useful in ordinary conversation, but it does not decide rent-control status. A purpose-built building can be covered if it was first occupied before the cutoff, while an addition or qualifying new basement apartment may be exempt if its first residential occupancy occurred afterward.
What the statute means by a new building or addition
The exemption can apply to an entirely new apartment building and to a qualifying addition to an older building. For an addition, the relevant question is whether any part of that building or addition had been occupied for residential purposes on or before November 15, 2018. The original portion of an older building and a later addition may therefore have different rent-control treatment.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteOntario’s guidance also refers to “most” new basement apartments. That wording matters: a basement unit is not automatically exempt merely because it is in a basement. Its first residential occupancy and the statutory facts must be established, and exceptions can apply.
What rent control controls
In this context, “rent control” primarily means the annual limit on increasing rent during an existing tenancy. For a covered unit, Ontario generally requires the landlord to:
- wait at least 12 months between rent increases;
- give at least 90 days’ written notice using the proper form; and
- stay within the annual guideline unless the Landlord and Tenant Board approves an above-guideline increase in a qualifying case.
The annual guideline percentage changes from year to year. The cutoff does not establish a permanent percentage; it determines whether the guideline regime applies to the unit. A landlord of a covered unit must use the guideline in force for the relevant year and follow the statutory timing and notice rules.
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Exemption from the guideline is not a blank cheque
For a genuinely exempt unit, the annual guideline cap does not apply. That does not mean every proposed increase is automatically valid in every circumstance. The tenancy agreement, the timing and terms of the tenancy, other provisions of the Residential Tenancies Act and any applicable transition rule still matter. A tenant should not assume that an informal demand or a change made contrary to the agreement is enforceable simply because the building is new.
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Starting rent after a vacancy is a separate issue
The guideline generally does not set the starting rent when a unit turns over to a new tenant. Ontario’s guidance identifies rental units upon turnover among situations where the guideline does not apply, so the landlord and incoming tenant generally agree on the new starting rent. That is different from an increase imposed during an ongoing tenancy.
For example, a covered building may have a regulated increase while one tenant remains in place, but the rent agreed with a new tenant after that tenancy ends is generally negotiated. Conversely, an exempt building has no annual guideline cap during the tenancy, but the actual agreement and applicable statutory rules still govern the landlord’s actions.
How to determine whether a specific apartment is exempt
Use the following sequence rather than relying on the building’s advertising, opening date or the tenant’s assumption about when construction finished.
- Identify the exact unit and structure. Determine whether it is in a wholly new building, an addition to an older building, a converted space or a new basement apartment. A large project can contain portions with different histories.
- Find the first residential occupancy date. The key date is when the building or relevant addition was first occupied for residential purposes, not necessarily the date construction started, the date a permit was issued or the date the first lease was marketed.
- Compare that date with November 15, 2018. Occupancy on or before the date generally points to guideline coverage. First occupancy after the date generally points to the exemption.
- Check the tenancy-agreement history. A tenancy agreement entered into on or before November 15, 2018 can prevent the exemption from applying to that tenancy. The statute contains additional transition provisions, so the agreement date must be examined even when the building itself appears new.
- Identify the rent question. Decide whether you are asking about the initial rent after turnover or a later increase during an existing tenancy. The guideline generally does not set a turnover starting rent.
- Ask what documentary proof exists. If the landlord relies on the exemption, the relevant occupancy and construction records should support that position.
Who must prove the exemption?
The landlord bears the onus of proving that the exemption applies. A tenant does not have to prove that a building is old enough for coverage before asking the landlord to substantiate an exemption claim.
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Ontario recommends retaining records such as:
- building permits and permit applications;
- approved plans and construction documents;
- occupancy permits or other records showing when residential occupancy began;
- new-home-warranty documents; and
- builder records that identify the first residential use.
Records should identify the relevant building or addition, not merely the date a development was announced or substantially completed. For a phased project, evidence may need to distinguish one tower, wing or addition from another.
What a tenant can do when the date is unclear
Ask the landlord in writing which date is being relied on and what part of the property that date covers. Keep the lease, notices, rent receipts and any listing or move-in material that describes the unit’s history. If the parties cannot resolve the issue, the dispute can be presented through the Landlord and Tenant Board process, where the landlord’s burden of proof remains important.
Common building scenarios
A new apartment tower first occupied in 2020
If no part of the tower was occupied for residential purposes on or before November 15, 2018, units in that tower are generally exempt from the annual guideline. The landlord still needs evidence supporting the first-occupancy date and must account for the tenancy agreement and the particular rent issue.
An older building with a 2021 addition
The original building may remain guideline-covered because it was occupied before the cutoff. A distinct addition first occupied in 2021 may qualify for the exemption if no part of that addition was occupied on or before November 15, 2018. The address alone is not enough to classify every unit the same way.
A new basement apartment
Most new basement apartments first occupied after the cutoff are exempt according to Ontario’s guidance. “Most” leaves room for statutory exceptions and makes the first-occupancy evidence essential. A basement unit created by converting a previously occupied residential space may not have the same status as a genuinely new unit.
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A tenancy agreement signed before the cutoff
The statute provides that if the tenancy agreement was entered into on or before November 15, 2018, the exemption does not apply to that tenancy, even though the property’s broader construction history may appear to point toward exemption. Additional transition provisions can affect the analysis, so the signed agreement and dates should be preserved.
A unit in a condominium rented by an owner
The question is still the statutory first-occupancy and tenancy history, not the marketing label. A condominium unit rented by an owner should not be assumed exempt or covered solely because it is a condominium; the applicable facts must be established.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Practical rules for covered units
When the unit is guideline-covered, calculate the increase using the applicable annual guideline and confirm that at least 12 months have passed since the last increase or the start of the tenancy. The landlord must give at least 90 days’ written notice on the proper form. An increase above the guideline requires Landlord and Tenant Board approval in qualifying circumstances; it is not created merely by putting a larger percentage in a notice.
A tenant who receives a notice should check the date of the last increase, the notice period, the form used and the percentage claimed. A mathematical error and an exemption dispute are different issues: the first concerns compliance with a covered-unit increase, while the second concerns whether the guideline applies at all.
Practical rules for landlords of newer buildings
A landlord intending to rely on the post-2018 exemption should assemble the occupancy evidence before a dispute arises. The file should connect the records to the exact building, addition or unit and explain any phased occupancy. Keep the signed tenancy agreement and a chronology showing when residential use began.
Marketing language such as “brand-new,” “luxury rental” or “purpose-built” is not a substitute for proof. If a property includes both older and newer portions, identify which portion is being treated as exempt and why. Clear documentation reduces the risk that a tenant, adjudicator or later property manager will have to reconstruct the history from incomplete records.
Frequent mistakes to avoid
- Using the construction-completion date. Completion, registration or first advertising may not be the first residential occupancy date.
- Treating the whole address alike. An older building and a later addition can have different treatment.
- Confusing turnover rent with an in-tenancy increase. The guideline generally does not set a new starting rent after a vacancy.
- Ignoring the tenancy-agreement date. An agreement entered into on or before November 15, 2018 can trigger transition rules.
- Assuming exemption means no rules apply. The exemption concerns the listed rent-control provisions; the agreement and other legal requirements still matter.
- Making the tenant prove a negative. The landlord has the burden of proving that the exemption applies.
- Relying on an outdated guideline percentage. Annual percentages change, so use the official figure for the relevant year.
What to check before signing or challenging a rent increase
- Request the building or addition’s first residential occupancy date.
- Confirm whether your unit is in the original structure, a later addition or a converted space.
- Record the date your tenancy agreement was made and the date you moved in.
- Determine whether the proposed charge is a new starting rent after turnover or an increase during your tenancy.
- For a covered unit, verify the 12-month interval, 90-day notice and applicable guideline.
- Keep permits, occupancy records, notices, leases and payment records together.
- Use the Landlord and Tenant Board process if the parties cannot resolve the classification or the amount.
Ontario’s guidance was updated June 23, 2026, and the governing statute and Board materials can change. For a live dispute, check the current version of the Residential Tenancies Act, 2006, the current rent-increase guidance and current Landlord and Tenant Board information rather than relying on an old lease guide or a building advertisement.
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