Indiana Short-Term Rental Laws by City (2026)
Short-term rental rules in Indiana are set city by city — a property that is legal to rent nightly in one town can be prohibited a few miles away. The table below covers 1 Indiana city (1 human-verified against official sources), with each city's legal status, permit cost, and last-verified date.
Statewide short-term rental rules in Indiana
Indiana has no statewide short-term rental permit or registration; STRs are regulated (if at all) by cities and counties, but state law sharply limits what locals can do. Under IC 36-1-24 (enacted 2018), an owner-occupied STR is a permitted residential use that zoning cannot disallow, local permits are capped at $150 with free renewals, and units with pre-2018 STR ordinances are grandfathered; a new law, HEA 1210 (effective July 1, 2026, IC 36-1-20-3.6), additionally bars localities from capping or restricting residential rental use, with pre-2026 ordinances given until January 1, 2028 to comply. Hosts owe Indiana's 7% state sales tax plus a county innkeeper's tax (3%-10%, varies by county), and marketplace platforms such as Airbnb/Vrbo have been required to collect both since July 1, 2019.
Full statewide rules: permits, taxes & enforcement
Indiana has no statewide short-term rental permit or registration; STRs are regulated (if at all) by cities and counties, but state law sharply limits what locals can do. Under IC 36-1-24 (enacted 2018), an owner-occupied STR is a permitted residential use that zoning cannot disallow, local permits are capped at $150 with free renewals, and units with pre-2018 STR ordinances are grandfathered; a new law, HEA 1210 (effective July 1, 2026, IC 36-1-20-3.6), additionally bars localities from capping or restricting residential rental use, with pre-2026 ordinances given until January 1, 2028 to comply. Hosts owe Indiana's 7% state sales tax plus a county innkeeper's tax (3%-10%, varies by county), and marketplace platforms such as Airbnb/Vrbo have been required to collect both since July 1, 2019.
Reviewed by the STR Rule Watch research team against 9 official sources. How we verify data
Indiana statewide STR rules at a glance
| Legal status | Unregulated |
|---|---|
| Permit required | No |
| Owner occupancy required | No |
| Primary residence only | No |
| Total occupancy taxes | ~12% of gross revenue |
| Insurance | No statewide insurance requirement. IC 36-1-24 contains no insurance mandate, and IC 36-1-24-10 (the list of subjects units may regulate) does not include insurance. |
| Enforcement | Enforcement is entirely local; the state issues no STR permits and runs no STR registry. |
| Current rules effective | 2018-07-01 |
State law & local authority
State preemption is the defining feature. IC 36-1-24-8: an owner-occupied STR is a permitted residential use under any local zoning ordinance and may not be disallowed in any district that permits residential use. IC 36-1-24-9: for non-owner-occupied STRs, a unit may require a special exception/special use/variance, but may not interpret or enforce its zoning in a manner intended to, or that has the effect of, prohibiting or unreasonably restricting STRs. Exception: the chapter does not apply to units that adopted STR-restricting ordinances before January 1, 2018 (e.g., grandfathered city ordinances). Effective July 1, 2026, new IC 36-1-20-3.6 (HEA 1210-2026) also forbids units from adopting or enforcing any measure that prohibits or restricts use of privately owned residential property as a rental property (long- or short-term); generally applicable health/safety, building/fire codes, occupancy standards, and registration/inspection programs survive so long as they do not operate as a cap. Pre-2026 non-compliant ordinances have until January 1, 2028 to comply; pre-2018 grandfathered STR ordinances remain exempt. HOA/condo association restrictions are NOT preempted (IC 36-1-24-19).
State-level taxes
| Tax | Rate | Who collects |
|---|---|---|
| Indiana state sales tax (gross retail tax) on accommodations rented <30 daysApplies to rentals of rooms/accommodations for periods of less than 30 consecutive days (IC 6-2.5-4-4). Marketplace facilitators (Airbnb, Vrbo, OTAs) must collect and remit on facilitated bookings and 'this cannot be contracted away' (DOR Sales Tax Information Bulletin #41); hosts must register as retail merchants and collect on direct bookings. Casual-renter exemption: a primary residence rented fewer than 15 days/year with no marketplace-facilitated payments is exempt. | 7% | varies |
| County innkeeper's tax (CIT)County-level tax on rentals <30 days, in addition to state sales tax. NO single statewide rate: DOR lists rates from 3% (Montgomery County) to 10% (Marion County), most counties 5%-8%; 5% is shown here only as a representative mid-range value — check the DOR county rate table for the actual county. Not every county has adopted a CIT. Since July 1, 2019 marketplace facilitators must collect CIT and remit it directly to DOR regardless of local ordinance; direct-booking hosts remit to DOR or the county depending on county ordinance. | 5% | varies |
Enforcement & penalties
Enforcement is entirely local; the state issues no STR permits and runs no STR registry. Where a unit has adopted a permit ordinance under IC 36-1-24: the unit must issue a permit within 30 days of a complete application (IC 36-1-24-11(d)); if 3 or more ordinance-violation citations are issued for a permitted property within a calendar year, the unit may revoke the permit for up to one year, with notice and hearing (IC 36-1-24-14); a new permit after revocation requires outstanding fines to be paid (IC 36-1-24-16). IC 36-1-24-20 puts owners on notice that direct-booking (non-marketplace) rentals make the owner liable for collecting state sales tax and county innkeeper's tax.
Renting without a valid permit in a unit that has adopted a permit ordinance is a Class C infraction, and each rental transaction completed without a permit is a separate violation (IC 36-1-24-18). Units may also revoke a permit for up to one year after 3+ ordinance citations in a calendar year (IC 36-1-24-14).
Statewide sources
- Indiana Code, Title 36, Article 1, Chapter 24 — Short Term Rentals (official code, Indiana General Assembly)retrieved July 20, 2026
- House Enrolled Act No. 1210 (2026), adding IC 36-1-20-3.6 and amending IC 36-1-24-6 (enrolled act PDF, Indiana General Assembly)retrieved July 20, 2026
- Indiana DOR — County Innkeeper's Tax (rates and collection)retrieved July 20, 2026
- Indiana DOR — Indiana County Innkeeper's Tax Guide (CIT guide PDF)retrieved July 20, 2026
- Indiana DOR — Sales Tax Information Bulletin #41: Sales Tax Application to Furnishing of Accommodations (March 2024)retrieved July 20, 2026
- Indiana DOR — Sales Tax (7% state rate)retrieved July 20, 2026
- Indiana Code 36-1-24-8 (owner-occupied STR permitted residential use) — FindLaw mirror of Indiana Coderetrieved July 20, 2026
- Indiana Code 36-1-24-13 (local permit fee cap) — FindLaw mirror of Indiana Coderetrieved July 20, 2026
- Avalara MyLodgeTax — New Indiana law bans local rental caps and reshapes short-term rental rules (HEA 1210 signing coverage)retrieved July 20, 2026
| City | Status | Permit fee | Last verified |
|---|---|---|---|
| Indianapolis | Permit required | $150 | July 21, 2026 |
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This page is informational only and is not legal, tax, or financial advice. Regulations change frequently — verify current requirements with each jurisdiction before operating. HOA and condo rules may prohibit short-term rentals regardless of city law.