Michigan City, IN Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Lakefront city on Lake Michigan next to Indiana Dunes National Park, a top Chicagoland weekend-beach-getaway market, and one of the more STR-friendly Indiana cities with a flat, low-cost permit.

A flat, inexpensive permit with no renewal fee and no confirmed cap, owner-occupancy rule, or banned zones — mainly registration and display requirements.

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.

Michigan City Rules

Governing jurisdiction: City of Michigan City (LaPorte County).

• Michigan City requires a $150 short-term rental permit with no renewal fee, administered by the planning department, with the permit placard posted on the exterior of the home.
• City officials have said roughly 90% of the local ordinance simply mirrors Indiana state short-term rental law rather than adding extra local restrictions.
• The city operates a dedicated non-emergency short-term rental complaint hotline and an online registration/complaint portal.
• Michigan City sits adjacent to Indiana Dunes National Park and Lake Michigan beaches, making it a strong beach-getaway alternative to pricier Michigan lakeshore towns across the state line.
• Indiana state law (IC 36-1-24) restricts what cities like Michigan City can impose — including barring minimum-night-stay rules, owner-residency requirements, and neighborhood-specific STR limits that treat STRs differently than other residential uses — which explains the city's relatively light-touch ordinance.
• Indiana's 2026 HEA 1210 further bars any future numeric rental-cap ordinance in Michigan City, reinforcing the currently permissive environment.

Not confirmed

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

• LaPorte County Innkeeper's Tax rate
• Occupancy limits and minimum stay length
• Whether the 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