Is Rental Arbitrage Legal in Indianapolis, IN?
Permit required, issued to the property owner. Indianapolis requires a short-term rental permit for each property, issued to its owner as of January 1, 2025, and state law bars the city from prohibiting short-term rentals or restricting them unreasonably. Non-owner-occupied rentals in residential zones can be made to seek a special exception or variance. Rental arbitrage is not permitted unless the owner holds the permit.
Can a renter do rental arbitrage here? No. Renters cannot get a short-term rental license here. Only owners can host.
Requirements
- City short-term rental permit for each property, issued to the property owner (required as of January 1, 2025)
- Applicant details: owner or property manager, property type, where it is advertised and the advertised occupancy
- Permit fee: $150 per property for initial issuance or post-revocation reapplication; no renewal fee
- Permit valid for one year; annual re-registration required
- Cannot operate in RVs, travel trailers, mobile homes, automobiles, shipping containers
- State and county sales tax registration
- Inspection may be required for code and safety compliance
Restrictions
- One permit per property; issued within 30 days of a complete application
- Permit issued to property owner only; tenants cannot hold the permit
- City can revoke permit after three violations of ordinance
- Non-owner-occupied rentals in residential zones may need a special exception or variance
- Zoning cannot be used to prohibit or unreasonably restrict short-term rentals (state law)
- Properties cannot be structures not built for permanent occupancy
Taxes and Fees
- Indiana sales tax on accommodations: 7% (on rentals under 30 consecutive days)
- Marion County innkeeper's tax: 10%
- Total combined state and county: 17%
Official permit or registration page
Next Step
Legal is one half of the decision. The other half is whether the deal earns enough to be worth the risk.
Run the numbers for Indianapolis, IN See the Indianapolis, IN market
Sources
Frequently Asked Questions
- Can a Renter Get an Indianapolis Short-Term Rental Permit?
- State law and the city's guide describe the permit as issued to the property owner, so a tenant can't hold one alone. Check with the city before signing a lease.
- Does Indianapolis Require a Permit?
- Yes, one permit for each property, with details of who manages it and where it is advertised.
- Can Indianapolis Ban Short-Term Rentals?
- Not by zoning. Indiana law bars cities from enforcing zoning in a way meant to or having the effect of prohibiting or unreasonably restricting short-term rentals.
- How Long Does Approval Take?
- Indiana law requires the city to issue a permit within 30 days of receiving a complete application.