Attention Residential Tenants and Landlords
The Director of Residential Tenancy has set the Annual Allowable Rent Increase, effective January 1, 2026 at 2% on all rental units, heated or unheated, including mobile home sites.
The 2026 Annual Allowable Rent Increase is based on Subsection 49 (2) of the Residential Tenancy Act, which sets out the factors that the Director of Residential Tenancy must consider when establishing the annual allowable increase.
Under Subsection 49(2) of the Act, the allowable annual rent increase is to be based on (a) written representations from landlords and tenants and (b) the percentage change from year to year in the All-Items Consumer Price Index for PEI.
In August 2025, the Director invited written representations from landlords and tenants and received a total of 34 submissions; 24 from landlords and 10 from tenants. The Director reviewed the submitted representations and noted that a few common themes emerged. In landlord representations, the issue of rising operating costs outpacing allowable rent increases was frequently raised. Additionally, landlords submitted that the increasing costs associated with operating rental units was making it difficult to maintain properties. In tenant representations, issues related to increasing costs of living were often raised, especially as it relates to tenants on fixed incomes. Tenants also commented on the limited availability of affordable units, a low vacancy rate, recent rent increases approved by the Director, and that landlords continue to profit from a market with a high demand for housing and limited stock.
In addition to analyzing the landlord and tenant representations, the Director also analyzed the percentage change from year to year in the All-Items Consumer Price Index (“CPI”) from the period of July 2024-June 2025. The representations made by landlords and tenants were then measured against the CPI data. The Director concluded that the representations of both landlords and tenants were accurately reflected by the CPI data and used this information to come to a balanced decision.
Based upon the factors set out in the Residential Tenancy Act, including a limit of a maximum 3% increase per calendar year, the 34 written submissions from landlords and tenants, the average percentage change in CPI, and no additional factors specified in the regulations, the Director has determined that the 2026 annual allowable rent increase for all residential properties will be 2%.
Landlords must provide proper notice to tenants and at least 3 months’ notice if there will be a rent increase. The Tenant Notice of Annual Allowable Rent Increase form can be found here.
Please note that landlords may still apply for a rent increase greater than the annual allowable amount by following the standard procedure an additional rent increase.
Please remember:
- An additional rent increase above the annual amount cannot exceed 3%. This means that if the annual allowable rent increase is 2%, a landlord can file an application for up to an additional 3% increase, as long as rent is increased only once in a 12-month period.
- Landlords cannot charge more than the annual allowable increase without first obtaining an Order from the Director of Residential Rental Property.
- Landlords must provide tenants with at least 3 months’ notice on a Form 8 if there will be an allowable rent increase.
Click here to see the 2026 Annual Allowable Rent Increase News Release
Click here to see the 2026 Annual Allowable Rent Increase Decision
For more information about rent increases in Prince Edward Island, please visit: Rent Increases (peirentaloffice.ca)
Click here for information on previous allowable rent increases.