Detroit vs Indianapolis

Michigan Legal but Limited | Indiana Legal with Permit

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

Detroit, Michigan
Status Legal but Limited
Permit Fee $500 annual license fee
Tax Rate 6% Michigan use tax + 6% Detroit Accommodations Tax (12% combined)
Day Limit 90 days/year
Renewal Annual
Platform Tax Yes
Max Fine Up to $1,000–$1,200 per violation for unlicensed operation
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

Detroit charges $500 annual license fee for STR licensing, while Indianapolis charges $150 one-time registration fee per property. Detroit renewal is annual, and Indianapolis renewal is annual. Overall, Indianapolis has a more permissive regulatory environment (Legal with Permit) compared to Detroit (Legal but Limited).

Tax Obligations

In Detroit, hosts pay 6% Michigan use tax + 6% Detroit Accommodations Tax (12% combined). 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

Detroit imposes a 90-night annual limit, while Indianapolis has no annual cap — a significant advantage for high-volume hosts.

Fines & Enforcement

Hosts operating without a permit in Detroit face penalties including Up to $1,000–$1,200 per violation for unlicensed operation. 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.

Detroit Overview

90-day annual rental cap; max 10 guests at any time; principal residence requirement. Liability insurance required and properties must pass safety inspection.

Contact: BSEED — (313) 224-2733

Full Detroit 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 Detroit or Indianapolis?
Detroit is classified as "Legal but Limited" while Indianapolis is "Legal with Permit." Detroit's permit fee is $500 annual license 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 — Detroit or Indianapolis?
Detroit charges 6% Michigan use tax + 6% Detroit Accommodations Tax (12% combined), 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?
Detroit: Up to $1,000–$1,200 per violation for unlicensed operation. Indianapolis: Up to $500 per violation; permit revocation after three violations. Both cities actively enforce STR regulations, so proper licensing is essential.
Do Detroit and Indianapolis have day limits for Airbnb?
Detroit limits STRs to 90 nights per year. Indianapolis has no annual day limit.
Which city is better for first-time Airbnb hosts — Detroit or Indianapolis?
For new hosts, consider the total cost of entry: Detroit charges $500 annual license fee for permits with 6% Michigan use tax + 6% Detroit Accommodations Tax (12% combined) 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 Detroit and Indianapolis makes compliance easier for beginners.