Indianapolis, IN Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Indiana's capital and largest city, with steady convention, Colts/Pacers, and Indy 500-driven STR demand across a large, diverse housing stock; the city only began requiring STR permits in 2025.

Registration is mandatory citywide with a real permit process and zoning review, including some reported prohibited historic/residential zones, but the state-capped $150 fee and lack of a confirmed numeric cap keep this below the harder cap/owner-occupancy tier.

Indiana State Law

State preemption: Yes — HEA 1210 (signed March 12, 2026; effective July 1, 2026) bars local governments from capping the number of rental properties, long-term or short-term, statewide. Local caps adopted before Jan 1, 2026 (e.g., Carmel, Fishers) are grandfathered but must fully phase out by January 1, 2028. The existing framework, IC 36-1-24, caps the initial/reinstatement STR permit fee at $150, bars a renewal fee, and preserves local authority over safety codes, inspections, registration, and occupancy limits.

Statewide rules: No statewide STR license. County Innkeeper's Tax is set individually by each of Indiana's 92 counties (roughly 5%-10%) on top of the 7% state sales tax.

Taxes: 7% state sales tax + County Innkeeper's Tax (varies by county; e.g., Marion County is 10%, for a combined ~17%).

2025–2026 legislation: HEA 1210 signed by Gov. Braun March 12, 2026, effective July 1, 2026: bans new local rental-count caps statewide and changes HOA voting so only homestead/primary-residence owners may vote on rental restrictions after that date.

Indianapolis Rules

Governing jurisdiction: City of Indianapolis / Marion County (consolidated government); Dept. of Business & Neighborhood Services (DBNS).

• Indianapolis began requiring STR registration citywide only at the start of 2025, after city officials said they lacked basic data on where short-term rentals were operating.
• The one-time permit fee is $150 — the maximum allowed under Indiana state law for an initial or post-revocation permit — and state law bars the city from charging a separate renewal fee.
• Owners with multiple STR properties must obtain a separate permit for each individual property.
• The city can revoke a permit after three documented ordinance violations at a property.
• Marion County's Innkeeper's Tax is 10%, on top of Indiana's 7% state sales tax, for a combined roughly 17% tax on gross short-term rental receipts.
• Indiana's 2026 HEA 1210 bars new local numeric rental caps statewide (effective July 1, 2026), so Indianapolis is unlikely to be able to add a hard cap even if it wanted to; the city retains authority over registration, safety, and occupancy rules.

Not confirmed

We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:

• Which specific residential/historic zones, if any, prohibit STRs
• Occupancy limits and minimum stay length
• Whether a permit transfers on sale

Buyer Due Diligence Checklist

Before you write an offer on a short-term rental here:

• Get a written determination from the governing jurisdiction for the specific parcel. Verbal guidance from anyone else is not diligence.
• Establish which jurisdiction governs — city, town, village and unincorporated county can differ sharply within a few miles.
• Ask whether an existing permit transfers on sale. In many markets it does not, and a listing marketed as a running short-term rental may convey nothing of the sort.
• Read the HOA or condo covenants during your inspection period. Private covenants bind even where the jurisdiction permits the use.
• Model revenue against the legal occupancy cap, not the bedroom count.

Frequently Asked Questions