Short-Term Rentals in Indianapolis, IN: What Residents Actually Need to Know

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 10 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.

Permit Requirements

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).

Noise Rules

Short-term rental hosts in Indianapolis must comply with the city noise ordinance even though Indiana law preempts most local STR regulation. Quiet hours apply to STR guests just like other residents.

Key details: State preemption: IC 36-1-24. Quiet hours: 10 p.m. to 7 a.m.. Enforcement: IMPD plus code enforcement. Strike threshold: Three substantiated complaints.

Citations for noise violations start around $50 and rise with repeat offenses. Three or more substantiated complaints within twelve months can lead to STR registration revocation under city rules.

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).

Insurance Requirements

Indianapolis does not mandate specific liability insurance for short-term rentals, since Indiana law limits how much cities can require. Hosts are still strongly advised to carry commercial-grade STR coverage.

Key details: City minimum: Not specified. Homeowner policy: Usually excludes STR. Platform coverage: Up to $1 million. Recommended: Commercial STR rider.

There is no city fine for going uninsured. Liability falls fully on the host and any insurer. Code-enforcement action can still apply if uninsured incidents trigger nuisance or safety complaints.

Indianapolis is more permissive than most cities when it comes to insurance requirements. That said, there are still limits.

Host Presence Rule

Indianapolis cannot require hosts to live on site at a short-term rental because Indiana law expressly preempts owner-occupancy mandates. Both hosted and unhosted rentals are allowed citywide subject to registration.

Key details: Statute: IC 36-1-24-8. Owner-occupancy: Cannot be required. Unhosted rentals: Allowed citywide. HOA covenants: Privately enforceable.

There are no city penalties tied to host absence. Nuisance, noise, and trash violations are enforced normally and can lead to STR registration revocation after repeated substantiated complaints.

The rules around host presence rule in Indianapolis lean permissive, but that does not mean anything goes.

Primary-Residence-Only Rule

Indianapolis cannot restrict short-term rentals to primary residences because Indiana state law preempts that requirement. Investor-owned STRs operate under the same registration as resident-owned rentals.

Key details: Preemption: IC 36-1-24. Primary residence rule: Cannot be imposed. Investor STRs: Allowed citywide. Annual registration: Required.

There is no city sanction for not living at the property. Penalties only attach to operating without registration, tax delinquency, or repeated nuisance complaints documented through code enforcement.

Indianapolis is more permissive than most cities when it comes to primary-residence-only rule. That said, there are still limits.

Parking Rules

Short-term rental guests in Indianapolis must follow standard residential parking rules. The city cannot impose STR-only parking caps, but generally applicable street parking, permit, and driveway rules still apply to guest vehicles.

Key details: Preemption: IC 36-1-24. Lawn parking: Prohibited citywide. Max stay one spot: 72 hours. Permit zones: Strict downtown enforcement.

Tickets for street violations range from $20 to $75. Vehicles left over seventy-two hours can be towed at owner expense. Repeat parking-related complaints can support STR registration revocation.

Night Caps

Indianapolis does not cap the number of rental nights per year, but Chapter 852 imposes a two-night minimum stay requirement on all permitted short-term rentals.

Key details: Code Section: Rev. Code Ch. 852. Minimum Stay: 2 nights. Annual Night Cap: None. Minimum Operator Age: 21.

Listing or accepting bookings shorter than two nights, or operating in a prohibited zone, can result in citation and permit revocation after three violations under Ch. 852.

Registration Rules

Revised Code Chapter 852 requires every short-term rental in Indianapolis to obtain a Short-Term Rental Permit from the Department of Business and Neighborhood Services before being listed on any platform.

Key details: Code Section: Rev. Code Ch. 852, Sec. 852-106. Initial Permit Fee: $150. Permit Issuer: Dept. of Business and Neighborhood Services. Transferable on Sale: No. Revocation Threshold: 3 violations.

Operating an unpermitted STR is subject to fines under Ch. 852; the city may revoke a permit after three violations of the short-term rental ordinance.

Taxes & Fees

Indianapolis STRs subject to a total tax rate of 17%: 7% Indiana state sales tax + 10% Marion County innkeeper's tax. Operators must register with Indiana Dept. of Revenue for a Retail Merchant Certificate. Platforms like Airbnb collect taxes automatically; Vrbo hosts self-remit.

Key details: Total Tax: 17% (7% state + 10% Marion County innkeeper's tax). Retail Merchant Certificate: Required from IN Dept. of Revenue. Airbnb: Taxes collected automatically. Vrbo: Host must self-remit taxes.

Non-remittance: back taxes plus 10% penalty plus interest. Marion County audit authority applies. Willful non-compliance may trigger criminal charges.

The Bottom Line

Compared to many U.S. cities, Indianapolis gives residents more room on short-term rentals. 3 of the 10 rules here are rated permissive. But permissive does not mean unregulated. There are still requirements, and the city does enforce them when violations are reported.

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.