Short-Term Rental Laws in Chicago, Illinois

Chicago operates a two-tier framework under the Shared Housing Ordinance: Shared Housing Hosts (single units, operator-residence required, must register annually) and Vacation Rentals (multi-unit operators, much more restrictive, require Vacation Rental License + each unit individually registered). Buildings can opt out of STR entirely via "prohibited buildings list" + neighbors can petition wards to ban STR. Chicago Vacation Rental Tax (4.5%) is on top of the Hotel Accommodations Tax (4.5%) for unhosted whole-unit rentals.

Shared Housing Hosts allowed in most residential zones provided operator-residence test is met. Vacation Rentals (multi-unit) restricted to specific commercial and mixed-use zones (B1, B2, B3, C1, C2, C3, M1, M2, DC, DR, DS, DX). The "Prohibited Buildings List" allows building owners (multi-family) to opt out entirely; the "Restricted Residential Zones" allow wards to ban STR via aldermanic petition. Confirm both building status AND ward status before any acquisition.

Operators must hold a short-term rental permit before listing. See the official permit portal.

Chicago Department of Business Affairs & Consumer Protection (BACP) administers. Annual registration + tax remittance via the city's online portal. Operating without registration: $1,500-$2,500 first violation + cease-rental order + back-tax. Vacation Rental License (multi-unit operators) requires individual building safety inspection + insurance. Platform integration (Airbnb/Vrbo) requires the platforms to remove non-compliant listings. The ward-petition framework makes Chicago STR rules effectively neighborhood-specific.

Combined short-term lodging tax in Chicago is approximately 17.390% of gross nightly revenue (state sales + state TRT + local TRT + applicable resort/city options).

Illinois State sales tax 6.25% + Cook County 1.75% + Chicago Hotel Accommodations Tax 4.5% + Chicago Vacation Rental Tax 4.5% + Tourism Promotion Tax — combined ~17.39% on transient lodging

Verify the current combined rate via the Utah State Tax Commission before remitting — rates drift quarterly.