Short-Term Rentals in Indianapolis, IN

If you live in Indianapolis or are thinking about moving there, short-term rentals are one of those things you probably won't think about until they affect you directly. Indianapolis has 4 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.

Short-Term Rental Permits

Indianapolis adopted Chapter 852 of the Revised Code (the Short-Term Rental Permit Program, effective 2025) requiring every short-term rental owner to obtain a permit from the Department of Business and Neighborhood Services. State law (IC 36-1-24-13) caps the fee at $150 for the initial permit, and renewals are free unless the permit was previously revoked for cause.

Key details: Local Code: Revised Code Ch. 852 (Short-Term Rental Permit Program). State Authority: IC 36-1-24-11. Fee Cap: $150 initial permit (IC 36-1-24-13); $0 renewal. Administered by: Dept. of Business & Neighborhood Services (DBNS). Issuance Deadline: 30 days from complete application (IC 36-1-24-12).

Operating without a required permit is a code-enforcement violation handled through the Indianapolis ordinance violations bureau; the city may issue citations and, after three or more citations in a calendar year, revoke the property's permit for up to one year (IC 36-1-24-14).

Occupancy Limits

Indiana law (IC 36-1-24-8) makes owner-occupied short-term rentals a permitted residential use that cannot be zoned out, while Indianapolis's Chapter 852 permit application requires owners to state each unit's advertised maximum occupancy; the city ties occupancy to the dwelling's bedroom count and building-code capacity rather than a flat citywide cap.

Key details: Owner-Occupied Rule: Permitted residential use; cannot be zoned out (IC 36-1-24-8). Non-Owner-Occupied: Special exception/variance allowed (IC 36-1-24-9). Occupancy Basis: Advertised occupancy + building/fire-code capacity. Local Program: Revised Code Ch. 852 permit application.

Advertising or hosting more occupants than the permitted/inspected capacity, or operating a non-owner-occupied STR without the required special exception or variance, is enforced through citations and possible permit revocation after three citations in a calendar year (IC 36-1-24-14).

Short-Term Rental Parking Rules

Indianapolis short-term rentals can't just park on the lawn: Section 852-105(3) requires STR parking to comply with the same off-street parking standards zoning applies to commercial areas, citing Zoning Ordinance Chapter 744, Articles IV, V, and VII, plus Chapter 931. The unit itself also has to be a real dwelling, not a parked vehicle.

Key details: Parking standard: Zoning Ch. 744 Arts. IV, V, VII (Sec. 852-105(3)). Also applies: Ch. 931 commercial-area parking rules. Barred structures: RVs, mobile homes, trailers, containers. Development plan: not required (Sec. 852-106(1)). Noncompliance risk: inspection, citation, or revocation.

Section 852-108 covers noncompliance with any short-term rental standard, parking included: owners who don't comply may face enforcement actions ranging from inspection to citations to outright revocation of the rental's registration, all under the authority of IC 36-1-24. There's no separate parking-specific fine schedule in Chapter 852; a parking violation is treated as a standards violation under this section.

Taxes & Fees

Marion County imposes a 10 percent innkeeper's tax on lodging under Sec. 121-204, a countywide levy adopted by the city-county council rather than a Consolidated City-only rule.

Key details: Current rate: 10 percent. Prior rate: 9 percent. Local section: Sec. 121-204(a)-(b). State authority: IC 6-9-8. Geographic scope: All of Marion County.

The ordinance itself sets only the rate; collection and remittance follow the state innkeeper's tax framework under IC 6-9-8 and its administration chapter, IC 6-9-29.

The Bottom Line

Indianapolis's short-term rentals rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Indianapolis is broadly strict or permissive.

This guide is based on Indianapolis's current municipal code. Local rules can and do change, so check the individual ordinance pages for the latest details, penalties, and FAQs.