Short-Term Rental Regulations in Indianapolis, IN

Indianapolis, the capital city of Indiana, has grown into a vibrant hub of culture, sports, and tourism. This growth has seen an increase in the popularity of short-term rentals, such as Airbnb. However, as with many cities, Indianapolis has put in place specific regulations governing these rentals to balance the interests of residents, property owners, and visitors.

This blog post delves into the details of these regulations, helping prospective Airbnb hosts understand their responsibilities and ensuring they stay compliant.

General Regulations for Short-Term Rentals in Indianapolis

In Indianapolis, short-term rentals (STRs) are defined as properties rented for fewer than 30 consecutive days. The city has implemented regulations to manage these rentals, focusing on zoning, registration, taxes, and operational standards.

Zoning and Permitting

Zoning regulations in Indianapolis are crucial for determining where short-term rentals can operate. Typically, STRs are allowed in residential, commercial, and mixed-use zones, but there are specific rules for each:

• Residential Zones: STRs are generally permitted, but properties must meet certain conditions, such as not being in a building with more than four units.
• Commercial and Mixed-Use Zones: These zones are more flexible, allowing STRs with fewer restrictions. However, it’s essential to verify the specific zoning requirements for your property.

Before operating an Airbnb, property owners must obtain a zoning permit from the Indianapolis Department of Business and Neighborhood Services (BNS). This ensures that the property complies with local zoning laws and is suitable for short-term rental use.

Registration and Licensing

All short-term rental properties in Indianapolis must be registered with the city. The registration process involves:

1. Filing an Application: Property owners must complete an application form available on the BNS website. The form requires details about the property, the owner, and the designated local contact person.
2. Paying a Fee: There is a registration fee, which must be paid at the time of application. This fee helps cover the administrative costs associated with managing short-term rentals in the city.
3. Renewal: Registration must be renewed annually. Failure to renew can result in penalties and the inability to operate the rental legally.

Taxation

Airbnb hosts in Indianapolis are required to collect and remit several taxes, including:

• Sales Tax: Indiana imposes a 7% sales tax on short-term rental bookings. This tax is typically added to the rental price and collected from guests.
• Innkeeper’s Tax: Marion County, where Indianapolis is located, imposes an additional 10% innkeeper’s tax on short-term rentals. This tax is also collected from guests and must be remitted to the county.

Airbnb often assists hosts by collecting these taxes automatically, but it’s the host’s responsibility to ensure compliance.

Operational Standards

Indianapolis has set operational standards to ensure the safety and well-being of guests and neighbors. These standards include:

Safety Requirements

• Smoke and Carbon Monoxide Detectors: All short-term rental properties must be equipped with functional smoke and carbon monoxide detectors.
• Fire Extinguishers: Hosts must provide fire extinguishers in easily accessible locations within the property.
• Emergency Information: Clear emergency contact information, including the local contact person’s details, must be provided to guests.

Occupancy Limits

Indianapolis enforces occupancy limits for short-term rentals to prevent overcrowding and ensure safety. The general rule is that the number of guests should not exceed two per bedroom, plus two additional guests. For example, a two-bedroom property can host up to six guests.

Noise and Conduct

To minimize disruptions in residential neighborhoods, hosts must ensure that their guests adhere to local noise ordinances. Quiet hours typically begin at 10 PM, and guests should be informed about these rules to avoid complaints from neighbors.

Compliance and Enforcement

The city of Indianapolis takes compliance with short-term rental regulations seriously. The BNS conducts regular inspections and investigates complaints related to short-term rentals. Non-compliance can result in fines, suspension of rental operations, and legal action.

Common Violations and Penalties

• Unregistered Rentals: Operating an Airbnb without proper registration can result in fines ranging from $500 to $2,500.
• Overcrowding: Exceeding the occupancy limits can lead to penalties and mandatory reductions in guest numbers.
• Noise Violations: Persistent noise complaints can result in fines and restrictions on rental operations.

Resources for Hosts

For those considering hosting an Airbnb in Indianapolis, several resources can help ensure compliance with local regulations:

• Indianapolis Department of Business and Neighborhood Services (BNS): The BNS website provides comprehensive information on zoning, registration, and safety requirements for short-term rentals.
• Airbnb’s Responsible Hosting Page: This page offers guidance on local laws and best practices for hosting.
• Marion County Treasurer’s Office: For information on tax collection and remittance, the Treasurer’s Office is a valuable resource.

Conclusion

Understanding and adhering to short-term rental regulations in Indianapolis is essential for a successful and compliant Airbnb hosting experience. By following the city’s guidelines on zoning, registration, taxation, and operational standards, hosts can contribute to a positive environment for guests and neighbors alike. Whether you’re a seasoned host or new to the short-term rental market, staying informed and proactive about these regulations is key to a smooth operation.