What is the BC annual rent increase cap?

The cap is set each year. For increases taking effect on or after January 1, 2027 it is 2.2%; for increases taking effect in 2026 it is 2.3% (it was 3.0% in 2025 and 3.5% in 2024), set under the Residential Tenancy Act and the Residential Tenancy Regulation. Landlords cannot raise rent by more than the limit for the year the increase takes effect without applying to the Residential Tenancy Branch for an additional increase under section 43(3) of the Act.

Can a BC landlord apply for a rent increase above the annual cap?

Yes — under section 43(3) of the Residential Tenancy Act, a landlord may apply for an additional rent increase by filing for dispute resolution at the Residential Tenancy Branch. The applicable framework is Policy Guideline 37D, which sets out when additional increases for expenditures (including financing costs) can be granted.

What does RTB Policy Guideline 37D say?

Policy Guideline 37D allows landlords to seek an additional rent increase if they have reasonably incurred a financial loss due to expenditures that could not have been foreseen under reasonable circumstances — including financing costs (interest or charges on money borrowed to purchase the property). The landlord has to prove the loss, prove it was unforeseen, and show the additional increase is needed to avoid the property becoming unsustainable.

How did the BC landlord get a 23.5% rent increase approved?

The landlords bought a four-plex in October 2021 with a variable rate mortgage at 1.9%. By July 2023 the rate had reached 6.65%, and financing costs jumped from $45,000 to over $80,000 in a year. The RTB found that the rapid rate increases were unforeseen, the landlords had proven their financial loss on a balance of probabilities, and an additional 23.5% rent increase was needed to avoid the property becoming unsustainable.

What evidence does a BC landlord need for an additional rent increase?

Mortgage statements showing the financing costs across the fiscal years in question, the original mortgage commitment showing the rate at acquisition, evidence the higher rate was not reasonably foreseeable at purchase, an income statement for the property showing the financial loss, and (often) an explanation of mitigation efforts. Tenant counter-evidence typically argues the costs were foreseeable or that the landlord's mitigation was inadequate.

Can a BC tenant dispute an additional rent increase from the RTB?

Yes. The dispute resolution process is two-sided — tenants are served with the application, can file evidence, and can attend the hearing. The RTB weighs the landlord's case (the expenditure, the foreseeability, the loss) against the tenant's response. Tenants who attend and put forward a substantive case meaningfully change outcomes.

Does an RTB rent increase ruling apply to all tenants in a building?

Each rental unit has its own tenancy agreement, and the additional increase under Policy Guideline 37D is granted in respect of the units covered in the application. A landlord applying for an increase across a multi-unit building has to include each unit in the application and serve each affected tenant. The increase, if granted, applies on a per-unit basis following the applicable notice periods.

How Much Can a Landlord Increase Rent in BC in 2027?

In British Columbia, how much a landlord can raise the rent is set by the Residential Tenancy Act (the “Act”) and the Residential Tenancy Regulation (the “Regulation”). Each year the province sets a maximum allowable increase for existing tenancies, and you can confirm the current figure on the BC government rent-increase page before serving or accepting a notice.

How Much Can a Landlord Raise the Rent in 2027 (and 2026)?

For any rent increase taking effect on or after January 1, 2027, the maximum is 2.2% of the current rent. Increases that take effect during the rest of 2026 stay capped at 2.3% (the caps were 3.0% in 2025 and 3.5% in 2024). The province announced the 2027 figure on August 27, 2026. Three rules travel with the cap:

A landlord can raise the rent only once in any 12-month period.
The tenant must receive at least three full months written notice, on the approved RTB form.
The cap that applies is the one for the year the increase takes effect, not the year the notice is served.

The notice rule sets the calendar: a landlord who wants the new rent in place on January 1, 2027 has to serve the notice by the end of September 2026. On a $2,200 monthly rent, the 2027 cap works out to a maximum increase of $48.40 (it was $50.60 under the 2026 cap). Our BC rent increase calculator does the arithmetic for any rent and any year from 2024 to 2027.

A landlord normally cannot exceed that cap. But the Act has an exception — and a 2024 Residential Tenancy Branch (“RTB”) decision used it to grant a landlord an additional 23.5% increase. That ruling raises the question the rest of this post answers: when can a BC landlord increase rent above the annual cap?

What Does the Law Say About Additional Rent Increases?

Under Section 43(3) of the Act, landlords may apply for a rent increase greater than the regulated limit by submitting an application for dispute resolution.

The Residential Tenancy Policy Guideline #37D - Additional Rent Increase for Expenditures offers guidance on when landlords may be entitled to such increases. Specifically, it allows landlords to request an additional increase if they have reasonably incurred a financial loss due to financing costs—costs that could not have been foreseen under reasonable circumstances. Financing costs here refer to the interest or charges associated with borrowing money to purchase the property.

The Case in Question: Financial Losses from Interest Rate Hikes

In this case, the landlords purchased a four-plex in October 2021, entering into a variable rate mortgage with an initial interest rate of 1.9%. However, by June 2023, that rate had spiked to 6.4%, and by July 2023, it reached 6.65%. These drastic increases led the landlords to incur financing costs of over $80,000 in the last fiscal year, compared to $45,000 in the prior year.

Faced with unsustainable costs, the landlords sought an additional rent increase, but the tenants were not willing to agree to it voluntarily.

The Landlords’ Argument

The landlords argued that despite the requested rent increase, they still wouldn’t break even on the property. However, they needed relief from the financial strain to avoid selling. They determined the increase amount by calculating a $10,000 net income loss—an amount they felt they could manage to keep the property.

RTB’s Decision: 23.5% Additional Rent Increase Granted

The RTB acknowledged that while the landlords had a financial cushion in place, the rapid and significant interest rate hikes made the situation unmanageable. The RTB found that the landlords had proven, on a balance of probabilities, all elements necessary to qualify for an additional rent increase due to financial loss from financing costs.

As a result, the RTB granted an additional rent increase of 23.5%, recognizing the financial strain caused by the unforeseeable interest rate hikes.

Key Takeaways for Landlords

This case highlights that while rent increase limits exist, landlords facing significant financial challenges—particularly from rising financing costs—may be able to seek additional relief through the RTB. However, they must demonstrate that these costs were unforeseen and have made managing the property unsustainable.

For more information and insights into this decision, read the full RTB ruling.

If you are a landlord weighing an above-cap application — or a property owner dealing with a difficult tenancy — talk to our team. On the maintenance side, see our guide to a landlord who won’t maintain your rental.

How Much Can a Landlord Increase Rent in BC in 2027? The Cap and the 23.5% Exception