Short-Term Rental Laws in Bloomington, Indiana

Bloomington — anchored by Indiana University — operates a two-tier STR framework. Type 1 (Owner-Occupied / Homestay) STRs are permitted in all residential zones by right. Type 2 (Non-Owner-Occupied) STRs in single-family residential zones (R-1, R-2, R-3, R-4) are limited via per-block density caps and require Type 2 registration with the Planning Department. The 2019 ordinance — predating most peer-city Midwestern frameworks — was a deliberate response to IU football/basketball weekend STR demand colliding with residential neighborhood character. HEA 1035 (2018) preemption shapes the limits of what Bloomington can restrict.

Type 1 (owner-occupied) permitted in R-1, R-2, R-3, R-4 residential, MS Mixed-Use Student Residential, MN Mixed-Use Neighborhood, MC Mixed-Use Commercial, and downtown overlays. Type 2 (non-owner-occupied) in residential zones requires Type 2 registration + per-block density verification — applications denied if the block exceeds the density cap. Type 2 in commercial / mixed-use zones is permitted more readily. Properties in the IU Stadium-area neighborhoods (Bryan Park, Elm Heights) face the tightest Type 2 density caps. Properties within Historic Districts (Courthouse Square, McDoel Gardens) have HPC overlays.

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

Bloomington Planning + Transportation Department administers. Annual registration renewal. Application requires designated local responsible-party contact, proof of property insurance, life-safety self-certification, parking plan, and (Type 2) per-block density verification. Monroe County Treasurer collects 5% Innkeeper's Tax. Operating unregistered: administrative penalties + back-tax assessment. The city's enforcement focuses on Type 2 registry compliance — Type 1 unregistered violations are typically warning-then-fine.

Combined short-term lodging tax in Bloomington is approximately 12.000% of gross nightly revenue (state sales + state TRT + local TRT + applicable resort/city options).

Indiana State sales tax 7% + Monroe County Innkeeper's Tax 5% — combined ~12% on transient lodging; confirm at Monroe County Treasurer

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