A guide for Bloomington and Monroe County short-term rental owners
Rules are the first thing we check on any home before it takes a guest. In Bloomington the rules come from three places: Indiana state law, the City of Bloomington code, and, outside city limits, the Monroe County development ordinance. Each layer covers different things. Below is every rule we have confirmed as of September 2026, stated plainly, with nothing added.
We are Joseph and Laura Sauer, owners of Hearth and Haven Hosting. I grew up in Bloomington, and it is where our Indiana focus starts. Knowing the rules is part of being a good neighbor, and it is part of protecting an owner’s income.
State law sets the floor for every Indiana city and county
Indiana state law, in Indiana Code title 36, article 1, chapter 24, defines a short-term rental as a home or unit rented for terms under 30 days through a short-term rental platform. That definition applies statewide.
The law then draws a line between two kinds of owners. An owner-occupied short-term rental is a permitted residential use anywhere homes are allowed. Cities and counties cannot zone them out. A non-owner-occupied short-term rental may be required to get a special exception, special use, or variance. Cities and counties may not use that process to prohibit them, and a denial can be appealed.
Local rules may cover only fire and building safety, sanitation, traffic, pollution, noise, property maintenance, nuisance, and an emergency contact. They must be enforced the same way they are enforced for any home.
Where a local permit exists, state law caps it. One permit per property. Issued within 30 days. Expires in one year. The fee is capped at $150, renewal is $0, and the owner makes the application. The application may ask for the property manager’s name, address, email, and phone. A permit can be revoked only after 3 or more citations in one calendar year, and for up to one year. Renting without a required permit is a Class C infraction per transaction. HOA and condo rules still apply on top of all of this.
The City of Bloomington has no short-term rental permit or cap as of September 2026, and its code defines the use
Inside city limits, the rule is simple to state. The City of Bloomington has no short-term rental permit, no cap on the number of short-term rentals, and no short-term rental use row in its zoning code in force as of September 2026. The state permit rules above describe what a city permit would have to look like if one existed. In Bloomington, one does not.
That is the whole of what the city requires on permits today. We watch the city’s code, and we will update this article if the rules change.
Bloomington’s code defines a short-term rental as the rental of an entire dwelling unit for under 30 consecutive days. It is a separate category from a bed and breakfast, a rooming house, or a hotel.
The city’s “family” rule sets how many unrelated adults may live in a home. In the R1 to R4 districts, the limit is 3 unrelated adults plus their dependent children. In other districts, the limit is 5. This is a zoning rule about who lives in a dwelling. Which district your home sits in is on the city’s zoning map, and how the rule reads on your home depends on your property and your district.
Bloomington’s bed and breakfast rules are a separate track
Some Bloomington owners run a bed and breakfast rather than a whole-home rental. That is a different use with its own rules. A bed and breakfast is a conditional use in the R1 to R4 districts and in the RM to RH districts, and a permitted use in the mixed-use districts. The owner or manager lives on site or next door. Stays run a maximum of 30 days. The home provides 1 parking space per guest bedroom.
If you rent the whole home and live somewhere else, these rules do not describe your use. If you rent rooms and live there, they do.
Unincorporated Monroe County permits owner-occupied rentals in every residential district
Outside city limits, Monroe County’s development ordinance applies. The county adopted it on December 18, 2024. Owner-occupied short-term rentals are permitted in all residential districts in unincorporated Monroe County.
Non-owner-occupied short-term rentals fall under the county’s “Tourist Home or Cabin” use. That use is permitted in the AGR, FOR, and CVR districts. In Board of Zoning Appeals cases, the county has applied two tourist home standards: a maximum of 2 guests per guest room and a 1-acre contiguous buildable area. Whether a given lot meets those standards depends on your property and your district.
A pool or spa at a tourist home in unincorporated Monroe County needs an annual county Health Department permit. The permit is due January 31 for a year-round pool or spa and April 30 for a seasonal one.
The tax on every stay under 30 nights is 12%
Every stay under 30 nights in Bloomington and Monroe County carries 7% Indiana sales tax plus 5% Monroe County innkeeper’s tax, 12% in total. That figure is the same inside and outside city limits.
Airbnb and Vrbo collect and remit both the sales tax and the innkeeper’s tax on stays booked through them. An owner who books only through those platforms does not have to register with the state for sales tax.
Direct bookings work differently. The operator registers for a Registered Retail Merchant Certificate, which costs $25 per location, files in INTIME, and remits monthly. The return is due 30 days after month end if the average monthly tax was $1,000 or less, and 20 days after month end if it was over. The Monroe County innkeeper’s tax on direct bookings is filed with Monroe County, separate from the state filing.
Two more tax facts catch owners. Sales tax applies to cleaning fees, pet fees, damage fees, resort fees, parking fees, and cancellation fees, along with the nightly rate. Stays of 30 or more consecutive nights are exempt from both the sales tax and the innkeeper’s tax.
Safety rules apply to every home that takes a guest
Indiana’s smoke detector law requires one detector outside each sleeping area and one on each level of the home, including the basement. If a detector fails, the owner repairs it within 7 working days of written notice. We test every detector at every turnover.
A pool or hot tub at a “tourist home,” which the state defines as a single-family home rented to tourists more than 3 times or 10 days a year, is treated as semipublic under state rules. Chlorine runs 1 to 7 parts per million in a pool and 2 to 7 in a spa. The spa maximum is 104°F. pH stays between 7.2 and 7.8. The water is tested at each guest change, and a lab sample goes out monthly. A first-aid kit and printed spa warnings are required.
Fireworks are allowed on your own property or with the owner’s permission, from 9 a.m. to 11 p.m., later on holidays. Fire pits burn clean wood only, stay attended, and have extinguishing equipment ready. Burn bans apply.
The platforms add their own safety rules. Airbnb has banned indoor cameras since April 30, 2024, even cameras that are turned off. Outdoor cameras must be disclosed and cannot point where guests expect privacy. Noise monitors that do not record audio are allowed if disclosed, and never in bedrooms or bathrooms. Vrbo allows no cameras or audio inside or pointed inside, and outdoor cameras must be disclosed before booking.
Guests, parties, and service animals have their own rules
Airbnb has had a permanent ban on disruptive gatherings of any size, and on “party-friendly” listings, since June 28, 2022. Vrbo has zero tolerance for broken anti-party house rules. We write those rules into every listing and every welcome message.
Both platforms require hosts to accept service animals with no fees and no documentation. Indiana’s service animal law has no small property exemption, so a single home follows the same rule as a hotel.
If a guest refuses to leave after the owner’s agent asks, that guest commits criminal trespass, a Class A misdemeanor under Indiana law. A property manager is the owner’s agent. We know that rule because knowing it is part of the job, and a clear checkout time in the agreement is what makes the request plain.
Our checklist for a Bloomington owner
Here is the list we run on every Bloomington home before it takes a guest.
- Confirm the zoning district on the city or county map, and whether the home is owner-occupied or non-owner-occupied.
- Inside the city: note the unrelated adult limit for the district (3 in R1 to R4, 5 elsewhere).
- Outside the city: confirm the district is one where the use is permitted, and check the 2 guests per guest room and 1-acre standards if the home is a tourist home.
- Confirm who remits the 12% tax on each booking channel. Register for the $25 Registered Retail Merchant Certificate if you take direct bookings, and file the Monroe County innkeeper’s tax with the county.
- Test every smoke detector and confirm the count: one outside each sleeping area, one per level, including the basement.
- If there is a pool or spa, set up the testing log and, in unincorporated Monroe County, the annual Health Department permit.
- Remove every indoor camera. Disclose every outdoor one. Disclose any noise monitor.
- Write the no-party rule and the service animal policy into the listing.
- Check the HOA or condo rules.
Every item on that list takes an hour or less. We have found that the owners who do it once, in one sitting, never think about it again, and the owners who skip it think about it at the worst possible time.
The bottom line
As of September 2026, the City of Bloomington has no short-term rental permit or cap, and state law sets the rules any future permit would have to follow. Inside the city, the code defines a short-term rental as a whole home rented under 30 consecutive days and limits unrelated adults to 3 in the R1 to R4 districts and 5 elsewhere. Outside the city, Monroe County permits owner-occupied rentals in every residential district and tourist homes in the AGR, FOR, and CVR districts. Every stay under 30 nights carries 12% in tax, and the platforms remit it on their bookings while direct bookings are filed by the operator. We check every item above on every home we take on.
Have any questions, or want a personal property analysis on a specific property? Call or text Joseph at 812-778-2235, email [email protected], or visit hearthandhavenhosting.com.
Safe travels,
Joseph and Laura
Hoo-Hoo-Hoo-Hoosiers!