Bloomington Short-Term Rental Regulations

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Permit & Licensing

Residential Rental Occupancy Permit

This permit type does not require primary residence.

Application Process

Complete a Rental Property Registration Form and email it to [email protected]; HAND schedules an inspection within 48 hours; a permit is issued for 3-5 years after the property passes inspection (or after required repairs are completed within 60 days).

Tax Obligations

Combined rate: 12% (7% Indiana state sales tax + 5% Monroe County innkeeper's tax) of gross rental income.

Rental Limits

Bloomington does not impose an annual cap on the number of nights you can rent.

Zoning & Restrictions

Check with local government

Insurance & Safety

Insurance

Bloomington does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage.

Safety & Operating Requirements

• Minimum bedroom size: no less than 70 sq ft and no less than 7 ft in any direction
• Every sleeping room must have an operable emergency escape and rescue opening (egress)
• Smoke detectors required in the living area, each bedroom, each level, and near the basement stairway
• HVAC may not be shared between units
• Plumbing may not be shared between units
• Electrical and GFCI outlets must meet the Indiana Electrical Code

Penalties for Non-Compliance

• Civil penalty of not more than $2,500 for each violation of Title 16, in addition to any other available remedy
• Maintaining an unregistered rental carries a penalty fine of up to $100 per day
• Each day a violation continues is a separate violation for penalty purposes

Compliance Checklist

Follow these steps to legally operate a short-term rental in Bloomington:

1. Meet safety requirements. Minimum bedroom size: no less than 70 sq ft and no less than 7 ft in any direction. Every sleeping room must have an operable emergency escape and rescue opening (egress). Smoke detectors required in the living area, each bedroom, each level, and near the basement stairway. HVAC may not be shared between units. Plumbing may not be shared between units. Electrical and GFCI outlets must meet the Indiana Electrical Code.
2. Apply for Residential Rental Occupancy Permit. Submit application. Contact city for fee details.
3. Register for tax accounts. Set up lodging tax accounts with Indiana Department of Revenue.
4. Collect and remit taxes. 12% (7% Indiana state sales tax + 5% Monroe County innkeeper's tax) on all bookings.
5. Renew as required. Contact city for renewal fee details.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Bloomington?

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Bloomington requires a Residential Rental Occupancy Permit.

Does Bloomington require a short-term rental to be your primary residence?

No. Bloomington allows non-owner-occupied short-term rentals, so investment properties can qualify provided you hold the required permit.

How many days a year can you short-term rent in Bloomington?

Bloomington does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.

What taxes do you pay on a short-term rental in Bloomington?

Short-term rental stays in Bloomington are subject to a combined 12% in lodging taxes. This combines 7% Indiana State Sales Tax + 5% Monroe County Innkeeper's Tax. The host is responsible for collecting and remitting them.

What happens if you run a short-term rental without a permit in Bloomington?

Operating without a permit can cost up to $2,500 per violation.