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Is Airbnb legal in Indianapolis, Indiana?

Legal with a city permit; state law bars local bans. Since January 1, 2025, every STR in Indianapolis needs its own annual permit from the Department of Business and Neighborhood Services under Chapter 852 of the Revised Code. The initial permit is $150 per unit with free renewals, and Indiana state law protects STRs from outright local bans.

Showing the researched rules for Indianapolis, IN below. Type your Indianapolis address to jump to the verdict.

Legal with permit

Legal with a city permit; state law bars local bans

Since January 1, 2025, every STR in Indianapolis needs its own annual permit from the Department of Business and Neighborhood Services under Chapter 852 of the Revised Code. The initial permit is $150 per unit with free renewals, and Indiana state law protects STRs from outright local bans.

Permit and costs

Permit
Short-Term Rental Permit
Issued by
Indianapolis Department of Business and Neighborhood Services
Cost
$150 initial per unit; renewals free
Renewal
Annual; permit expires one year after issue

Key limits

Per-unit permits
Each STR unit is permitted individually; operating without one is a Class C infraction with every booking counted separately.
Safety standards
Working smoke and CO detectors, fire extinguishers, and posted emergency contact information are required.
Local contact
A 24/7 local contact must be designated for emergencies.
Occupancy
Guest limits are tied to property size, typically around two guests per bedroom plus two additional.

Taxes

State sales tax
7% Indiana gross retail tax on every booking
County innkeeper's tax
Up to 10% in Marion County; Airbnb and Vrbo collect and remit both on platform bookings

Registration checklist

  1. 1
    Gather documents
    Prepare proof of ownership, property details, IDs, and liability insurance.
  2. 2
    Apply with BNS
    File the annual permit application with the Department of Business and Neighborhood Services.
  3. 3
    Register for taxes
    Get an Indiana Retail Merchant Certificate from INBiz ($25) for state tax collection.

What could change this verdict

Your HOA
HOA and condo covenants can still ban STRs regardless of state protection, so read the governing documents.
Rule changes
A 2026 Indiana law bars cities from capping rental use of residential property, with older local caps getting until January 1, 2028 to comply.

Sources

Indianapolis STR guide (2026) · Indiana statewide STR guide

Rules researched October 2026. They change, so verify with the city before you buy.

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Verify before you buy. Rules change often and vary by zoning, HOA, and building type. This is a research starting point, not legal advice. Always confirm with the city's planning or business-license office before signing anything.