Short-term rentals in Indianapolis: permits, zoning and taxes

Indianapolis is an events city before it is a tourist city. The Indianapolis 500 in May fills every bed for miles, and the calendar around it is dense: conventions downtown, the NFL Scouting Combine, Big Ten and NCAA tournaments, Colts and Pacers games, Gen Con in the summer and a big university and hospital presence. Most rentals are homes and duplexes in Fountain Square, Irvington, Bates-Hendricks, Broad Ripple and the Near Eastside, plus downtown condos.

The city permit program

Since the start of 2025, every short-term rental in Indianapolis must hold a city permit, one per property, so an owner with three houses needs three permits. Indiana law shapes the program: a permit runs one year, the city may charge no more than $150 for the first permit and nothing for renewals, and three citations at the same property within a calendar year allow the city to revoke the permit for up to a year after a hearing. The program was designed largely to identify owners and reach absentee operators when neighbors complain, so your contact details must be current and reachable.

Zoning: the question to ask

If the home is your primary residence, state law makes the rental a permitted residential use. If it is an investment property, the statute allows a local government to require a special exception or variance in residential districts. Our atlas records that risk for Indianapolis. We did not find evidence of a systematic special exception process for rentals in the city's current rules, so confirm with the Department of Business and Neighborhood Services and zoning staff how your parcel is treated before you buy.

Taxes

Guests pay Indiana sales tax and the Marion County innkeeper's tax, which is one of the higher county rates in the state. Platforms collect both on the bookings they process; direct bookings require your own registration and filings.

Race month and other peaks

• Set minimum stays and occupancy rules for 500 weekend and the big conventions well in advance.
• Parties are the main source of citations; a house with a party problem can lose its permit in one season.
• Condo associations downtown often limit short stays; read the declaration.

Our advice

Indianapolis rewards owners who plan the year around its event calendar and protect their permit record. Keep a responsive local contact, document your house rules, and treat the annual renewal as a fixed date. We study every request and tell you honestly whether and how we can help.