Rent increases in 2026: the TAL's new calculation, explained

Since 1 January 2026, Quebec has calculated rent increases in a new way. The starting point is no longer a line-by-line review of the building's operating expenses, but the three-year average of Quebec's consumer price index (CPI). For 2026, the Tribunal administratif du logement (TAL) set this base percentage at 3.1%. On top of it come, where they apply, the part of any tax and insurance increase above that rate, and 5% a year of the cost of major work.

For a 12-month lease renewing on 1 July 2027, the increase notice goes out between 1 January and 31 March 2027. So this fall is the time to understand the method, gather invoices and prepare the numbers. Here is the calculation, step by step.

What changed on 1 January 2026

The regulation that governs rent fixing was amended by Order in Council 1455-2025, published in the Gazette officielle on 17 December 2025. The government describes it as the first major revision of the method in more than 40 years. Its stated goals: increases that are simpler and more predictable, based on the owner's real costs, with a faster return on money spent maintaining the building.

The old method, built on the building's income and expenses (energy, maintenance, management, net income), no longer applies to notices given on or after 1 January 2026. If your notice was given before that date, the old method still governs. The TAL publishes both sets of percentages and offers a calculator for each method.

The criteria in the new calculation

1. The base percentage, on the whole rent

This is the average of Quebec's all-items CPI over three years. For renewed leases starting between 2 April 2026 and 1 April 2027, it is 3.1%. If the average were ever negative, it would count as zero.

2. Municipal and school taxes

Only the part of an increase that exceeds the base percentage earns an extra adjustment. If municipal taxes go up 6%, the adjustment is 6 − 3.1 = 2.9% of the monthly taxes attributable to the unit. The same rule applies to school taxes.

3. Insurance premiums

Fire and liability insurance premiums follow the same logic: only the gap above the base percentage is added.

4. Major work

For major repairs or improvements made during the reference period, 5% of the unit's share of the cost is added to the annual rent. The rate is now fixed; under the old method it would have been 4.0% in 2026. Put simply, the owner recovers the cost of the work over about 20 years, without interest. Grants and insurance payouts reduce the eligible cost, and only the units that benefit from the work carry the increase.

A new schedule to the regulation gives examples of qualifying work:

• foundations, structure, roofing, cladding, balconies, stairs and railings, masonry repointing;
• doors and windows, French drains, waterproofing, fire-safety upgrades;
• renovated kitchens or bathrooms, floors, electrical upgrades, soundproofing, laundry rooms, storage;
• insulation, heating or air conditioning, solar panels, EV charging stations, backflow valves, green roofs, paving.

5. A new service

If you add a service, an accessory or an outbuilding, the recurring costs it creates, estimated over a full year, can also be added. In private seniors' residences, the part of the rent tied to personal services follows the health-care component of the CPI instead: 6.7% for 2026.

A worked example

The example below is an illustration built from the regulation. For your own figures, use the TAL's official calculator.

Without the tax increase and the roof, the increase would stop at $37.20. Tax bills and work invoices are what justify going above the base percentage. Keep every one of them.

The notice calendar

An increase does not happen on its own. The owner proposes it in writing, the tenant may refuse it, and if they disagree, the TAL sets the rent. The notice must be sent within set time limits:

The notice is written, dated and signed. It states the new rent, the increase in dollars or the increase as a percentage, reminds the tenant that they have one month to refuse, and includes the wording required by regulation. Keep proof of delivery: registered mail, hand delivery against a signature, or another reliable method. If several tenants signed the lease, the TAL recommends sending a notice to each of them.

If nothing changes, no notice is needed: the lease renews on the same terms. A letter simply asking whether the tenant is staying another year is not a notice of change, and the tenant does not have to answer it.

If the tenant refuses

• The tenant has one month from receiving the notice to refuse the increase or announce that they are leaving. If they say nothing, they are deemed to accept.
• If they refuse, they keep the unit. The owner then has one month from receiving the refusal to ask the TAL to fix the rent. Without an application, the lease renews at the same rent.
• Before the TAL, the owner is no longer bound by the amount in the notice: the Tribunal applies the regulation, and the result can be higher.
• After filing, the owner must complete the "Information necessary for the fixing of rent" (RN) form and file it within 90 days, with proof that the tenant was notified, or the file is closed. At the hearing, the owner brings original invoices, tax bills, and insurance and work invoices.

The filing fee for a rent-fixing application is $59, $70 or $92 depending on the rent ($92 when the rent is over $600 a month).

Why an agreement beats a hearing

In 2024–2025, the TAL received 22,494 rent-fixing and review applications, a record. The average wait for a first hearing in that category was 9.2 months. A calculation done on the official tool and shown to the tenant with the supporting documents often settles the matter without the wait. The TAL may also order the tenant to repay the filing fee when it grants at least the increase in the notice and the owner had given the tenant access to the figures before filing.

Getting ready for 2027

The TAL published the 2026 percentages on 19 January 2026. The 2027 figures are expected in January 2027; until then, the 2026 numbers are the latest. To be ready:

• list your leases and their end dates;
• file the 2025 and 2026 municipal and school tax bills;
• keep your insurance renewal notices;
• gather invoices for major work and the split by unit;
• plan a delivery method that leaves proof of receipt.

The calendar, the calculation, the notices and the follow-up on refusals are part of our residential management, and we prepare rent-fixing files for the TAL when an agreement isn't possible. The rent charged to a new tenant follows different rules, covered in our article on the mandatory lease and Section G.

Want to know what your rents allow for 2027? Location Ajax has managed condos, plexes and rental buildings across Greater Montréal since 2019. Reach us through the contact form: the 30-minute consultation and the written quote are free.

This article provides general information as of 25 September 2026. It is not legal advice. For a specific situation, check with the Tribunal administratif du logement or a lawyer.

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