Indiana short-term rental rules for owners

Indiana was one of the first states to write a short-term rental statute, and it did so with a clear split. If the rental is your primary home, the law protects it. If it is an investment property, cities and counties keep a real, if limited, say. Understanding that split is the whole game in Indiana.

IC 36-1-24: what the 2018 law says

Chapter 24 of Title 36, added in 2018, applies to rentals of less than 30 days at a time booked through a short-term rental platform. It covers single-family homes, units in two-family and multifamily buildings, condominium, cooperative and timeshare units, and guest houses on single-family lots. Its main rules:

• Owner-occupied rentals are a permitted residential use. If the property is your primary residence, no zoning ordinance may disallow it in a district that permits housing.
• Other rentals can require zoning approval. For a property that is not your primary residence, a local government may require a special exception, a special use or a variance in residential zones. It may not interpret or enforce that requirement to prohibit or unreasonably restrict rentals, and a denial can be appealed.
• Regulation must have a listed purpose: fire and building safety, sanitation, traffic, pollution, noise, property maintenance and nuisances, enforced the same way as for homes that are not rented, plus the usual bans on housing sex offenders, sober living homes, drug activity and adult businesses, and a requirement to provide an emergency contact.

Permits: capped and simple

The statute also frames local permits. A permit lasts one year. A local government may charge up to $150 for an initial permit, or for a new permit after revocation, but it may not charge anything to renew. After three or more citations for ordinance violations at the same property within a calendar year, the permit can be revoked for up to one year, after notice and a hearing. These limits are why Indiana permit programs tend to look alike.

Taxes: sales tax plus innkeeper's tax

Stays of less than 30 days carry two main layers:

• Indiana sales tax of 7% on the accommodation;
• a county innkeeper's tax, set county by county and noticeably higher in some urban counties.

Marketplace facilitators collect these taxes on the bookings they process in most cases. Direct bookings, and any county the platform does not cover, mean registering with the Indiana Department of Revenue and filing yourself.

How our Indiana cities use the law

• Indianapolis (License): a citywide short-term rental permit program since the start of 2025, built within the state fee cap.
• South Bend (License): in September 2026 the Common Council passed registration and a zoning special exception for rentals that are not owner-occupied, both effective January 1, 2027, with existing rentals grandfathered.
• Bloomington (License in our atlas): all rentals fall under the city's rental registration and inspection program; we found no dedicated special exception process in force, a point to confirm with the city.
• Fort Wayne (Open): no city short-term rental permit or zoning category identified.
• Indiana Area (License): smaller towns and lake and dune country, where county and town zoning decide how the special exception rule is used.

Private covenants still bind

The statute limits governments, not associations. A condominium declaration or HOA covenant that prohibits rentals under 30 days is enforceable regardless of IC 36-1-24. Around the northern lakes and in suburban subdivisions, read the covenants before anything else.

Checklist for an Indiana purchase

• Primary residence or investment? The answer decides which half of the statute applies.
• Does the local zoning code require a special exception for non-owner-occupied rentals, and how often is it granted?
• Is there a local permit, and is it renewed on time each year?
• Which county innkeeper's tax applies, and does your platform remit it?
• Do HOA or condominium documents allow short stays?

Our advice

In Indiana, the investor's real risk is a zoning hearing, not a ban. Before buying a non-owner-occupied rental, find out whether the city requires a special exception and what the board has decided in similar cases; after buying, keep a clean citation record, because three in a year can cost you the permit. If you own a property here or are considering one, we study every request and tell you honestly whether and how we can help.