Nashville, IN Airbnb & Short-Term Rental Regulations 2026
What it takes to run a legal short-term rental in Nashville, Indiana — the local permit position, state law, taxes and the diligence that decides whether a purchase works.
Brown County's wooded hills, Nashville's arts-colony downtown, and Brown County State Park drive one of Indiana's strongest vacation-cabin rental markets; county rules require discretionary zoning approval and minimum spacing between rental cabins. Short-term rentals here are governed by Brown County Planning Department & Board of Zoning Appeals governs unincorporated county (where most vacation cabins sit); the Town of Nashville has its own separate zoning for in-town properties.. Local position: Special Exception (Board of Zoning Appeals) for Short-Term Rental.
Regulation Overview
Brown County's wooded hills, Nashville's arts-colony downtown, and Brown County State Park drive one of Indiana's strongest vacation-cabin rental markets; county rules require discretionary zoning approval and minimum spacing between rental cabins.
New short-term rentals in unincorporated Brown County require discretionary Board of Zoning Appeals approval and must meet minimum distance-from-neighbor and distance-from-other-STR spacing rules, which functions as a de facto density cap in popular cabin clusters.
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.
Nashville Rules
Governing jurisdiction: Brown County Planning Department & Board of Zoning Appeals governs unincorporated county (where most vacation cabins sit); the Town of Nashville has its own separate zoning for in-town properties..
- Brown County requires a Special Exception approved by the Board of Zoning Appeals before an unincorporated-county property can operate as a short-term rental — a discretionary hearing, not an over-the-counter permit.
- County rule sets minimum spacing: at least 250 feet from the nearest residence and at least 1,320 feet (a quarter mile) from the nearest other licensed short-term rental, which caps achievable density in the most popular cabin clusters.
- Long-term rentals (30+ days) do not need any Special Exception or Planning Department permit, so the STR-specific approval is squarely aimed at nightly/weekly cabin rentals.
- A separate, lighter-weight 'Home Stay' category covers an owner-occupied single-family home renting up to two guest rooms, distinct from whole-home vacation rentals.
- Properties within Town of Nashville limits are governed by the town's own zoning rather than the county's Special Exception process — eligibility depends on which zoning district the property sits in.
- Indiana's 2026 HEA 1210 preempts local numeric rental caps statewide effective July 1, 2026, but Brown County's distance-based Special Exception criteria are a discretionary zoning approval rather than a stated numeric cap, so how it will be treated post-HEA-1210 is unclear and should be confirmed with the county before purchase.
Not confirmed
We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:
- Special Exception application fee
- Brown County Innkeeper's Tax rate
- Occupancy limits and minimum stay length
- Whether a Special Exception approval transfers automatically on sale of the property
- How Brown County's distance rule will be treated under Indiana's new HEA 1210 rental-cap preemption
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
Do I need a permit to run a short-term rental in Nashville?
Special Exception approval from the Brown County Board of Zoning Appeals, applied for through the Planning Department; in the Town of Nashville, eligibility instead depends on the property's town zoning district.
Who regulates short-term rentals in Nashville?
Brown County Planning Department & Board of Zoning Appeals governs unincorporated county (where most vacation cabins sit); the Town of Nashville has its own separate zoning for in-town properties.. Which jurisdiction a parcel falls in is the first question to settle.
Does Indiana preempt local short-term rental rules?
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.
Does an existing permit transfer when I buy the property?
Not confirmed for this market. Do not assume so — confirm in writing with the jurisdiction before you write an offer.
Can my HOA or condo association stop me?
Yes. Private covenants are enforceable independently of what the jurisdiction permits. Read them during your inspection period.
Primary sources
- Brown County, IN – Planning Department
- Nashville, IN – Short-Term Rental (Town of Nashville)
- Avalara – Indiana bans city caps on rental properties (HEA 1210)
- Indiana Code Title 36 Art 1 Ch 24 (Justia)
- Indiana Dept of Revenue – County Innkeeper's Taxes (PDF)
Short-term rental rules change frequently. Confirm current requirements with the jurisdiction before you buy or list.
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