Chicago vs Indianapolis

Illinois Legal but Limited | Indiana Legal with Permit

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

Chicago, Illinois
Status Legal but Limited
Permit Fee $250 annual registration fee
Tax Rate 10.5% combined city tax (4.5% Hotel Accommodations + 6% Shared Housing Surcharge) + 1% Cook County
Day Limit No limit
Renewal Annual
Platform Tax Yes
Max Fine $1,500–$5,000 per offense; each day is a separate offense
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

Chicago charges $250 annual registration fee for STR licensing, while Indianapolis charges $150 one-time registration fee per property. Chicago renewal is annual, and Indianapolis renewal is annual. Overall, Indianapolis has a more permissive regulatory environment (Legal with Permit) compared to Chicago (Legal but Limited).

Tax Obligations

In Chicago, hosts pay 10.5% combined city tax (4.5% Hotel Accommodations + 6% Shared Housing Surcharge) + 1% Cook County. In Indianapolis, hosts pay 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined). Both cities benefit from automatic platform tax collection through Airbnb and similar services, simplifying compliance for hosts.

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 Chicago face penalties including $1,500–$5,000 per offense; each day is a separate offense. 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.

Chicago Overview

Must be host's primary residence; buildings with 5+ units limited to no more than 6 STR units; Restricted Residential Zones and Prohibited Buildings List apply. $1M commercial general liability insurance required.

Contact: Dept. of Business Affairs and Consumer Protection — (312) 744-6060

Full Chicago 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 Chicago or Indianapolis?
Chicago is classified as "Legal but Limited" while Indianapolis is "Legal with Permit." Chicago's permit fee is $250 annual registration fee 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 — Chicago or Indianapolis?
Chicago charges 10.5% combined city tax (4.5% Hotel Accommodations + 6% Shared Housing Surcharge) + 1% Cook County, while Indianapolis charges 7% Indiana sales tax + 10% Marion County innkeeper's tax (17% combined).
Which city has stricter fines for illegal short-term rentals?
Chicago: $1,500–$5,000 per offense; each day is a separate offense. Indianapolis: Up to $500 per violation; permit revocation after three violations. Both cities actively enforce STR regulations, so proper licensing is essential.
Do Chicago and Indianapolis have day limits for Airbnb?
Chicago has no annual day limit. Indianapolis has no annual day limit.
Which city is better for first-time Airbnb hosts — Chicago or Indianapolis?
For new hosts, consider the total cost of entry: Chicago charges $250 annual registration fee for permits with 10.5% combined city tax (4.5% Hotel Accommodations + 6% Shared Housing Surcharge) + 1% Cook County 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 Chicago and Indianapolis makes compliance easier for beginners.