Austin vs Indianapolis

Texas Legal but Limited | Indiana Legal with Permit

Disclaimer: General information only — not legal advice. Verify with your local government.

Austin, Texas
Status Legal but Limited
Permit Fee $450/year (Type 2); $50/year (Type 1 homestead)
Tax Rate 15% Hotel Occupancy Tax (9% city + 6% state)
Day Limit No limit
Renewal Annual
Platform Tax No
Max Fine $500–$2,000/violation; license revocation possible
Indianapolis, Indiana
Status Legal with Permit
Permit Fee $150 one-time registration fee per property
Tax Rate 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined)
Day Limit No limit
Renewal Annual
Platform Tax Yes
Max Fine Up to $500 per violation; permit revocation after three violations

Indianapolis has more favorable STR regulations overall.

Permits & Licensing

Austin charges $450/year (Type 2); $50/year (Type 1 homestead) for STR licensing, while Indianapolis charges $150 one-time registration fee per property. Austin renewal is annual, and Indianapolis renewal is annual. Overall, Indianapolis has a more permissive regulatory environment (Legal with Permit) compared to Austin (Legal but Limited).

Tax Obligations

In Austin, hosts pay 15% Hotel Occupancy Tax (9% city + 6% state). In Indianapolis, hosts pay 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined). A key difference: platforms like Airbnb automatically collect taxes in Indianapolis, but hosts in Austin must collect and remit taxes themselves — a significant operational burden.

Day Limits & Restrictions

Neither city imposes an annual day limit on short-term rentals, giving hosts year-round flexibility.

Fines & Enforcement

Hosts operating without a permit in Austin face penalties including $500–$2,000/violation; license revocation possible. In Indianapolis, violations can result in Up to $500 per violation; permit revocation after three violations. Both cities actively enforce their STR regulations, so securing proper licensing before listing is essential in either market.

Austin Overview

Type 1 (owner-occupied) is allowed citywide. Type 2 (non-owner-occupied) licenses are no longer issued in residential areas — existing Type 2 licenses expire April 2027.

Contact: Austin Code Department — 3-1-1 or (512) 974-2000

Full Austin guide →

Indianapolis Overview

Indiana state law prevents municipalities from banning STRs but allows permitting. Hosts must collect and remit gross retail tax and Marion County innkeeper's tax.

Contact: Dept. of Business and Neighborhood Services — (317) 327-8700

Full Indianapolis guide →

Frequently Asked Questions

Is it easier to Airbnb in Austin or Indianapolis?
Austin is classified as "Legal but Limited" while Indianapolis is "Legal with Permit." Austin's permit fee is $450/year (Type 2); $50/year (Type 1 homestead) compared to $150 one-time registration fee per property in Indianapolis. Overall, Indianapolis has a more host-friendly regulatory environment.
Which city has higher STR taxes — Austin or Indianapolis?
Austin charges 15% Hotel Occupancy Tax (9% city + 6% state), while Indianapolis charges 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined). Notably, Indianapolis benefits from automatic platform tax collection, while hosts in Austin must handle taxes themselves.
Which city has stricter fines for illegal short-term rentals?
Austin: $500–$2,000/violation; license revocation possible. Indianapolis: Up to $500 per violation; permit revocation after three violations. Both cities actively enforce STR regulations, so proper licensing is essential.
Do Austin and Indianapolis have day limits for Airbnb?
Austin has no annual day limit. Indianapolis has no annual day limit.
Which city is better for first-time Airbnb hosts — Austin or Indianapolis?
For new hosts, consider the total cost of entry: Austin charges $450/year (Type 2); $50/year (Type 1 homestead) for permits with 15% Hotel Occupancy Tax (9% city + 6% state) in taxes. Indianapolis charges $150 one-time registration fee per property with 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined). Automatic tax collection in Indianapolis makes compliance easier for beginners.