10 verified short-term rentals rules for Carmel, Indiana, sourced directly from the municipal code and official government pages.
Verified from official government sources
Carmel historically regulated short-term rentals (stays under 30 days) as bed-and-breakfasts under its Unified Development Ordinance (Z-629-17), requiring a Special Exception from a Board of Zoning Appeals hearing officer. Indiana House Enrolled Act 1210 (2026) retroactively voided that approach, so confirm the city's current permit process before listing.
Carmel has no STR-specific noise ordinance; short-term rental guests must follow the city's general noise and nuisance rules. Indiana's STR statute lets cities enforce neutral health-and-safety standards like noise limits on STRs, but not as a disguised ban. Hosts are responsible for guest conduct.
Carmel STR stays under 30 days carry Indiana's 7% state sales tax plus Hamilton County's 8% innkeeper's tax (effective January 1, 2024), totaling about 15%. Any local short-term rental permit fee is capped by Indiana Code 36-1-24-13 at $150. Airbnb and Vrbo often collect these taxes automatically.
Carmel has no published short-term-rental-specific parking standard. STR guests are subject to the city's general residential parking and zoning rules. Indiana's STR statute (IC 36-1-24) lets cities apply neutral standards to STRs as long as they are not used to effectively ban rentals. Verify current city requirements before listing.
Carmel does not publish a specific short-term-rental guest-count cap. Indiana law (IC 36-1-24) lets local governments set reasonable occupancy limits for STRs, but the city's own published materials describe its STR controls through zoning approval rather than a numeric occupancy figure. Verify any current limit with Carmel's Department of Community Services.
Indiana law requires short-term rental owners to maintain primary liability insurance covering third-party claims for injury, death, or property damage during rentals. Carmel's STR rules reference an insurance requirement, and the city's special-exception process could attach conditions. Hosts should carry adequate liability coverage, as platform protections may not be sufficient alone.
Carmel does not publish an annual night cap limiting how many nights a property can be short-term rented. Indiana House Enrolled Act 1210 (2026) prohibits local governments from limiting residential rentals in ways that act as caps or bans, which constrains any night-cap approach. The city's own STR controls used zoning approval, not a night limit.
Carmel's 2026 Residential Rental Dwelling Registration Program (Ordinance D-2770-25) applies to long-term rentals of 30 days or more and explicitly excludes short-term rentals. STRs were instead handled through the UDO's special-exception process, which Indiana HEA 1210 voided in 2026. Verify the city's current STR registration status before listing.
Carmel did not impose a published rule requiring the host to be physically present during stays, but it did require the short-term rental to be the owner's primary residence under the UDO (Z-629-17). Indiana's statute distinguishes owner-occupied from non-owner-occupied STRs; HEA 1210 (2026) voided Carmel's UDO STR restrictions.
Carmel historically limited short-term rentals to a host's primary residence: only primary-resident homeowners could obtain the required Special Exception from a Board of Zoning Appeals hearing officer. Indiana House Enrolled Act 1210 (2026) retroactively voided Carmel's UDO STR restrictions, so this primary-residence requirement may no longer be enforceable.
County ordinances apply to unincorporated areas and may supplement Carmel city rules.
Short-Term Rentals in Hamilton County →