The Director of Residential Tenancy has set the Allowable Annual Rent Increase, effective January 1, 2027 at 2.1% on all rental units, heated or unheated, including mobile home sites.
The 2027 Allowable Annual 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 allowable annual rent 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 2026, the Director invited written representations from landlords and tenants and received a total of 85 submissions; 25 from landlords and 60 from tenants. The Director reviewed the submitted representations and noted that a few common themes emerged. In landlord representations, two main themes emerged: increased operating costs and increased maintenance costs. Landlords expressed that costs related to operating units and repairing/maintaining them continue to increase. Landlords also expressed that it is difficult to maintain properties and address repairs when the gap between what a landlord can charge and what it costs to maintain housing is growing.
The representations from tenants included two main themes as well: affordability and continued landlord profits. Tenants raised the issue of affordability and highlighted the challenges of a fixed income when the cost of living continues to increase. Tenants also highlighted that most landlords continue to make a profit on rental units while not keeping up with the maintenance of them.
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 2025-June 2026. 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 85 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 2027 allowable annual rent increase for all residential properties will be 2.1%.
Landlords must provide proper notice to tenants and at least 3 months’ notice if there will be a rent increase. The Tenant Notice of Allowable Annual Rent Increase form can be found here.
Please note that landlords may still apply for a rent increase above 2.1% by following the standard procedure for an above allowable rent increase.
Please remember:
- A rent increase more than the Allowable Annual Rent Increase cannot exceed 3%. This means that if the allowable annual rent increase is 2.1%, a landlord can file an application for up to an additional 3% increase.
- The Rental Office must approve any additional increase above the allowable annual rent increase. Landlords cannot charge an above allowable increase in rent without first obtaining an Order from the Director of Residential Rental Property.
- Rent can only be increased once in a 12-month period.
- Landlords must provide tenants with at least 3 months’ notice on a Form 8 if there will be an allowable rent increase.
NEW in 2027: Click here to see a Plain Language Summary of the Allowable Annual Rent Increase Decision
Click here to see the 2027 Allowable Annual Rent Increase News Release
Click here to see the 2027 Allowable Annual Rent Increase Decision
For more information about rent increases in Prince Edward Island, please visit: Rent Increases (peirentaloffice.ca)