Is Airbnb & Short-Term Rentals Legal in Indiana? (2026)
Yes — Airbnb & Short-Term Rentals are legal in Indiana as of 2026.
Law changed in 2024: Indianapolis passed a new ordinance in September 2024 requiring registration and a $150 fee. In the 2025-2026 legislative sessions, bills like SB411 were introduced to address property tax implications for short-term rentals, and a bill was passed pr...
Quick Answer
Short-term rentals are legal in Indiana. Indianapolis passed a new ordinance in September 2024 requiring registration and a $150 fee. Hosts should verify local ordinances and tax requirements before listing.
What the Law Says
Indiana state law requires the collection of a 7% sales tax on rentals under 30 days. A 2026 law shifted some regulatory power, preventing municipalities from capping the number of rentals but giving more authority to Homeowners Associations (HOAs) to regulate or ban them.
— Ind. Code § 36-1-24
| Category | Details |
|---|---|
| State-Level Rules | Legal; check local ordinances |
| Local Permit Requirements | Legal; may need business license |
| Violation Penalties | Must collect and remit applicable lodging/occupancy taxes. |
| Pending Legislation | None known |
Indianapolis passed a new ordinance in September 2024 requiring registration and a $150 fee. In the 2025-2026 legislative sessions, bills like SB411 were introduced to address property tax implications for short-term rentals, and a bill was passed prohibiting local governments from enforcing rental caps.
Enforcement Reality
Enforcement is handled at the local level, but within the framework of a state law that prevents outright bans. Cities like Indianapolis require permits and can issue fines for non-compliance, with a Class C infraction carrying a fine up to $500.
A common mistake is operating without a required local permit, such as in Indianapolis. Another is failing to collect and remit the 7% state sales tax and any applicable county innkeeper's taxes.
Local Exceptions
State law sets the baseline. These cities or counties have additional rules that may differ:
Bottom Line
Airbnb & Short-Term Rentals are legal in Indiana. You can operating a short-term rental without violating state law, though federal rules and local ordinances may still apply. Always verify current law before acting.
Indiana vs. the Rest of the US
Across the US, operating a short-term rental is fully legal in 35 states, restricted in 15, and illegal in 0. Indiana falls in the LEGAL category.
View the full 50-state map →Neighboring States
Laws change at state lines. Here is how bordering states compare on Airbnb & Short-Term Rentals:
Frequently Asked Questions
Is operating a short-term rental legal in Indiana?
Do you need a permit to run an Airbnb in Indiana?
Does the law on operating a short-term rental change at the Indiana border?
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Reviewed by cross-referencing the cited state statute against current legislative databases and regulatory publications.
Sources & Verification
This page was reviewed by Ethan Harper by comparing the legal status against the cited state statute. AllowedHere is an informational resource and does not provide legal advice. Consult a licensed attorney for guidance specific to your situation.
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