Michigan City Short-Term Rental Regulations

New to short-term rentals? Jump to the compliance checklist →

Permit & Licensing

Short-Term Rental Permit

This permit type does not require primary residence.

Application Process

Owners apply for the short-term rental permit through the city's online Cloudpermit portal (also used for other permits and business registration) or through the Building Permits & Inspections / Planning and Inspection Department. Applications require owner and property-manager contact information and a description of how the rental is marketed and advertised. The Planning and Inspection Department must issue the permit within 30 days of receiving a complete application; the permit is not transferable to a new owner if the property is sold.

Tax Obligations

Combined rate: 12% of gross rental income.

Collection: Indiana sales tax and the LaPorte County innkeeper's tax apply to the rental of rooms, lodgings, or other accommodations furnished for periods of less than 30 consecutive days, and hosts (including those renting through Airbnb/VRBO) generally must register as retail merchants and collect both taxes unless a marketplace facilitator collects and remits on their behalf. A person who rents their primary residence for fewer than 15 days in the current or preceding calendar year is exempt from both taxes on that rental, unless the payment was made through a marketplace facilitator.

Rental Limits

Michigan City does not impose an annual cap on the number of nights you can rent. Individual-stay rule: Under 30 consecutive days (rentals of 30 days or more are not classified as a short-term rental under the ordinance).

Zoning & Restrictions

• Michigan City's short-term rental ordinance (Municipal Code Ch. 26, Art. V) does not impose any STR-specific zoning-district restriction; the permit requirement applies citywide regardless of zoning district.
• Indiana state law (IC 36-1-24-8) independently makes a short-term rental of owner-occupied property a permitted residential use in any zoning district that allows residential use, and no Michigan City zoning ordinance may disallow it.
• Under IC 36-1-24-9, a non-owner-occupied short-term rental located in a residential zoning district may be made subject to a special exception, special use, or zoning variance, but the city may not interpret or enforce that requirement in a way that prohibits or unreasonably restricts short-term rentals.

Insurance & Safety

Insurance

Michigan City 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.

Penalties for Non-Compliance

• Operating without a permit is a Class C infraction under IC 36-1-24-18; each short-term rental transaction completed without a valid permit is a separate violation of the ordinance.
• Failure to comply with the other terms and conditions of the short-term rental ordinance is subject to a fine of $500 (Municipal Code Sec. 50-167(b)).
• Three or more ordinance-violation citations issued against a permitted property within a calendar year may result in revocation of the permit for up to one year, following written notice and a hearing before the city Board of Public Works and Safety.

Market Snapshot

Demand context for Michigan City from official government and tourism statistics — the latest published annual figures, not a projection of rental income.

Figures are the latest annual statistics published by the linked official sources (retrieved 2026-07-13). Visitor counts cover the geography stated by each source, which can be wider than the city itself. Regulations above — not market conditions — determine whether and how you may operate.

Compliance Checklist

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

1. Apply for Short-Term Rental Permit. Submit application + $40 fee.
2. Register for tax accounts. Set up lodging tax accounts with LaPorte County Auditor; Indiana Department of Revenue.
3. Collect and remit taxes. 12% on all bookings.
4. Renew annually. $0 renewal fee.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Michigan City?

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Michigan City requires a Short-Term Rental Permit.

How much does a short-term rental permit cost in Michigan City?

A Short-Term Rental Permit in Michigan City costs $40 per year.

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

No. Michigan City 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 Michigan City?

Michigan City 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 Michigan City?

Short-term rental stays in Michigan City are subject to a combined 12% in lodging taxes. This combines 5% LaPorte County Innkeeper's Tax + 7% Indiana State Gross Retail (Sales) Tax. Hosts are legally responsible; many booking platforms collect and remit them automatically on the host's behalf.

What are the penalties for short-term rental violations in Michigan City?

Penalties run up to $500 (see the Penalties section for the full schedule).