Thinking about renting out your Carmel home or buying an investment property here? New rules are coming that could affect your plans. You want clarity, timing, and a simple checklist so you can stay compliant and protect your returns. Below, you’ll find the key facts on Carmel’s new 10% rental cap, who it covers, when it starts, and what to do next. Let’s dive in.
What changed and when
On June 2, 2025, the Carmel Common Council adopted Ordinance D-2770-25 that creates a single-family rental permit and a rental cap. You can see the meeting record from the adoption date in the council archive. Review the council meeting record.
The city has announced a pre-registration period in 2025, with the permit requirement scheduled to start on January 1, 2026. Details and updates are posted on the City of Carmel’s page for the new registry. Visit the City of Carmel rental registration page.
Local coverage describes a 10% cap on rental permits within each platted subdivision and a 10% cap across the city as a whole. See WISH-TV’s summary and The Times’ reporting.
Who is affected
The ordinance applies to single-family homes rented to someone other than the owner for periods of 30 consecutive days or more. The city’s Community Services page explains the single-family rental registry and cap. Check the city’s overview.
Short-term rentals are already regulated differently, and local reporting notes several exemptions for certain temporary situations. Read local coverage of exemptions and grandfathering.
The 10% rental cap explained
The city intends to limit permits so that no more than 10% of homes in any platted subdivision hold rental permits. Local reporting also describes a 10% limit citywide, with new permits issued on a first-come, first-served basis until a cap is reached. See The Times’ coverage and WISH-TV’s summary.
This cap means your ability to convert a home to a rental could be restricted if your subdivision is already at 10% when the portal opens.
Grandfathering and exemptions
If you currently operate a single-family rental in Carmel, news coverage indicates you may be grandfathered if you apply during the city’s enrollment period. Do not assume grandfathering without submitting the application. Review local reporting on grandfathering.
Reported exemptions include scenarios like temporary owner absence, employer relocation, military deployment, a property listed for sale for an extended period, and rentals to immediate family members. Final definitions and documentation standards will come from the city’s ordinance text and guidance. See the summary of reported exemptions.
HOAs still matter
Council discussion emphasized that the ordinance does not override HOA covenants. If your HOA bans or restricts rentals, those rules still apply. View the council meeting record.
Penalties and enforcement
Local coverage reports a civil fine of about $500 for failing to register, with details to be confirmed by the city’s final enforcement rules. Always check the city’s official materials for the latest penalties. See The Reporter’s coverage.
What owners must do now
Monitor the City of Carmel rental registration page and sign up for alerts so you know when pre-registration and the portal go live. City rental registration page
Pre-register as soon as the city opens enrollment so you receive timely instructions and deadlines.
If you already rent the home, gather documents now: deed or tax bill, current lease with dates, proof of tenancy, and contact info for any local manager.
If you plan to rent in 2026, check your subdivision’s rental percentage when the city publishes the registry or map. If your area is at or near 10%, consider alternatives like owner occupancy, selling, or pursuing a different property type.
Review your HOA covenants to see if rentals are restricted. City permits will not legalize a rental that violates HOA rules.
Prepare exemption documentation if applicable, such as job transfer letters, military orders, listing history, or proof of immediate family tenancy.
Update your leases and insurance to reflect local obligations. City staff have emphasized strong maintenance standards during council discussions. See the meeting record.
If your property is owned through an entity or your structure is complex, consider consulting a local real estate attorney. Council committees discussed beneficial-owner disclosure during deliberations. See committee discussion.
Buyers and investors: due diligence steps
- Confirm whether the property already holds a rental permit or is eligible for grandfathering before you write an offer.
- Ask the status of the subdivision’s percentage-rented once the registry or map is live. If the cap is reached, new permits may be denied.
- Review HOA rules in parallel with city requirements.
- Build permit timing and cap risk into your offer strategy and closing timeline.
Timeline at a glance
- June 2, 2025: Council adopted Ordinance D-2770-25. View the adoption meeting
- Summer 2025: City announced pre-registration and development of the online portal. City rental registration page
- January 1, 2026: Permit requirement is scheduled to take effect for single-family rentals.
- Ongoing: The city may refine administrative rules and guidance as the program rolls out.
Market outlook: what this could mean
Capping single-family rental permits can tighten available rental inventory in certain subdivisions. That may influence pricing, investor strategy, and how buyers weigh rent-vs-sell decisions. Nearby Fishers adopted a similar approach earlier, which provides useful context for how caps can play out operationally. See Fishers context from a local practitioner.
Need a local strategy you can trust?
If you are weighing whether to rent, sell, or buy in a capped subdivision, you deserve clear guidance tailored to your goals. Our Carmel-based team blends appraisal-grade pricing, construction insight, and neighborhood expertise to help you make a confident decision. Reach out to VIP Home Client LLC to talk through your options.
FAQs
What properties need a permit under Carmel’s rental cap?
- Single-family homes rented to someone other than the owner for 30 days or more fall under the new permit requirement once it takes effect.
When does Carmel’s rental permit requirement start?
- The city’s schedule points to January 1, 2026 for the permit requirement, with pre-registration offered beforehand.
How will Carmel’s 10% cap work in my subdivision?
- The city intends to limit permits so no more than 10% of homes in a platted subdivision hold permits, with first-come processing once the portal opens.
Are short-term rentals affected by Carmel’s new cap?
- Short-term rentals are regulated under separate rules, and local reporting indicates they are not the focus of this single-family long-term rental cap.
Can my existing Carmel rental be grandfathered?
- Local coverage indicates current rentals may be grandfathered if owners apply during enrollment, so you should submit promptly when the portal opens.
Do HOA rules override a city rental permit in Carmel?
- Yes, HOA covenants still apply; a city permit will not authorize a rental that violates HOA restrictions.
What are the penalties if I do not register my Carmel rental?
- Local reporting cites a civil fine around $500 for failing to register, with the city to confirm exact amounts in its enforcement rules.
