What do first-time landlords need to do to rent out a Markham home legally?To rent out a Markham home legally, use Ontario’s Standard Form of Lease for most residential tenancies, collect no more than a last month’s rent deposit and an optional refundable key deposit, and follow the annual rent increase guideline, which is 2.1% for 2026 for units it covers. Screen tenants fairly under the Ontario Human Rights Code. In Markham, renting a whole home for less than 30 days is generally not allowed. Tell your insurer and lender, keep working smoke and carbon monoxide alarms, make sure any basement suite is legal, and report rental income on your tax return.
Renting out a home can help with the mortgage, keep a property you plan to return to, or start an investment plan. It also makes you a landlord under Ontario law, with rules that apply from the first conversation with a tenant.
Michael John Lau, a REALTOR® with the Kaizen Real Estate Team, one of the most active real estate teams in Markham and York Region, helps owners prepare a home for lease and understand the main rules before they sign with a tenant.
Before you list: a landlord checklist
- Tell your mortgage lender and confirm renting is allowed.
- Switch to landlord or rental insurance and ask the tenant to carry tenant insurance.
- For condos, read the rental rules in the declaration and by-laws.
- Make sure any basement or second unit meets the city’s rules.
- Test smoke and carbon monoxide alarms and document the home’s condition with photos.
- Set a rent based on similar homes recently leased nearby.
The lease and deposits
Most private residential tenancies in Ontario must use the province’s Standard Form of Lease. If a landlord does not provide it, the tenant can request it, and in some cases withhold rent until it is provided.
| Payment | What the law allows |
|---|---|
| Rent deposit | Up to one month’s rent (or one period), used only for the last month |
| Interest on the deposit | Paid each year at the rent increase guideline rate |
| Key deposit | Optional and refundable |
| Damage deposit | Not allowed |
| Post-dated cheques | Can be requested, not required |
Fair and legal tenant screening
Landlords can ask for references, a credit check with consent, and income information. Under the Ontario Human Rights Code, landlords cannot refuse a tenant because of race, ancestry, place of origin, religion, sex, sexual orientation, family status, disability, age, marital status or because they receive public assistance, among other grounds. That includes refusing families with children. Use the same questions and standards for every applicant, and keep notes on how each decision was made.
Thinking about renting out your Markham home?
Michael John Lau can help you price the rent from recent leases nearby and prepare the home for the right tenant.
Book a leasing consultationSearch Markham homesPrefer to talk? Call the Kaizen Real Estate Team at (647) 370-8885.
Rent increases and ending a tenancy
- Rent increase guideline: 2.1% for 2026 for units it applies to, with 90 days’ written notice and at least 12 months between increases.
- Newer units: units first occupied for residential purposes after November 15, 2018 are generally exempt from the guideline, but the 12-month and notice rules still apply.
- Ending a tenancy: a lease does not end automatically. Tenancies usually continue month to month, and landlords can end them only for reasons allowed by law, using the correct Landlord and Tenant Board forms.
- Own use: ending a tenancy so you or a close family member can move in has specific notice and compensation rules.
Disputes go to the Landlord and Tenant Board, where hearings can take months. Clear records, a well-written lease and a careful tenant choice prevent most problems.
Markham rules: short-term rentals and second units
The City of Markham generally does not allow a whole home to be rented for less than 30 days. Short stays are limited to renting part of your principal residence, and the city has been reviewing its approach to short-term rentals, so check the latest rules before listing on a booking platform. If you plan to rent a basement or other additional unit, it should meet zoning, building and fire code requirements. See Markham’s legal basement suite rules.
Taxes and records
Rental income must be reported on your tax return, and eligible expenses such as mortgage interest, property tax, insurance, repairs and some utilities can usually be deducted. Renting out your home can also affect the principal residence exemption and may count as a change in use for tax purposes. Speak with an accountant before the first tenant moves in. Keep receipts, the lease, condition photos and all notices in one folder.
Being a good landlord
Landlords must keep the home in good repair, provide vital services such as heat and water, and give at least 24 hours’ written notice before entering for most reasons. Responding quickly to repairs and communicating clearly usually leads to longer, smoother tenancies. Ultimately, the decision is yours. The goal is to make sure you have all the information before you hand over the keys.
A good tenancy starts with the right paperwork, the right tenant and clear communication. Call the Kaizen Real Estate Team at (647) 370-8885 or book a consultation.
Frequently asked questions
Do I have to use the Ontario Standard Lease?
For most private residential tenancies, yes. If you do not provide it, the tenant can request it.
Can I ask for a damage deposit in Ontario?
No. Landlords can collect a last month’s rent deposit and an optional refundable key deposit, but not a damage deposit.
How much can I raise the rent in 2026?
The 2026 guideline is 2.1% for units it covers. Units first occupied after November 15, 2018 are generally exempt from the guideline.
Can I rent my Markham home on Airbnb?
Markham generally does not allow a whole home to be rented for less than 30 days. Check the city’s current short-term rental rules.
Can I refuse to rent to a family with children?
No. Refusing tenants because of family status is not allowed under the Ontario Human Rights Code.
Do I pay tax on rental income?
Yes. Rental income is reported on your tax return, and eligible expenses can usually be deducted. Speak with an accountant.
Michael John Lau and Neeraj Moolchandani are licensed REALTORS® with the Kaizen Real Estate Team, eXp Realty, Brokerage, 9763 Markham Rd, Markham, ON L6E 1A4. Licence #4784577. Call (647) 370-8885. Lease, deposit and rent increase rules are from the Government of Ontario and the Residential Tenancies Act as of October 14, 2026. Screening rules reflect the Ontario Human Rights Code. Short-term rental rules are from the City of Markham and may change. This is general information, not legal or tax advice. This article is general information only and is not financial, legal or tax advice. Not intended to solicit buyers or sellers currently under contract with another brokerage.
