Overview: Are short‑term rentals allowed in New Castle, IN?

• Explicit answer: Based on Indiana state law and standard municipal practice, short‑term rentals are likely permitted in New Castle, IN as a residential use (subject to zoning and other local requirements). However, no New Castle–specific or Henry County–specific STR ordinance is provided in the sources, so local verification is essential before listing or operating. As a practical matter in Indiana, many cities treat STRs as either a lodging use (requiring registration and taxes) and/or a residential use conditional upon compliance with building, fire, and safety codes. Invest only after confirming zoning, licensing, and tax obligations with the City of New Castle and Henry County.

How to start a short‑term rental business in this market

• Confirm zoning and permitted use
  • Verify with New Castle Planning/Building Department that STRs are an allowed use at your property’s address and zone (e.g., R‑1, R‑2, C‑1). Even if STRs are generally allowed, buildings in special overlay districts or historic districts may face additional approvals or design standards.
• Obtain business and tax registrations
  • Indiana Registered Retail Merchant Certificate (RRMC): Required if you collect Indiana sales tax on lodging. Apply online with the Indiana Department of Revenue (DOR); expect to provide your IRS EIN and personal ID; a small state fee may apply. If you’re not sure, call DOR at 317‑232‑2240.
  • Henry County innkeeper’s/Transient Guest Tax registration: Contact the Henry County Treasurer to register for the county innkeeper’s tax and obtain filing instructions (rates and remittance forms vary by county).
• Licensing and safety compliance (local)
  • Apply for any city or county STR registration/permit if required. Where no STR‑specific ordinance is published, a standard rental property registration or business license may still be necessary.
  • Complete safety/building/fire inspections if requested; install and maintain required devices (smoke and CO detectors, fire extinguisher), post emergency egress maps, and ensure occupancy limits are clear and visible.
• Tax collection and remittance
  • State sales tax (currently 7% on the rental amount) must be collected and remitted via your RRMC.
  • County innkeeper’s tax (commonly 1% of the rental amount; must be confirmed with the county) is due in addition to state tax. Confirm how often you must file (monthly or quarterly) and whether the local tax is remitted through DOR or directly to the county.
• Setup and operations
  • Publish house rules, occupancy limits, quiet hours, parking, and check‑in procedures.
  • Designate a local contact who can respond to issues within a reasonable time window. Many Indiana municipalities require a local contact to be identified in your application or registration.
  • Consider professional management or software for tax filing, housekeeping, and guest screening.

Required documents, permits, licenses, and guidelines

• Legal/ownership
  • Proof of ownership (recorded deed or title info) and government‑issued ID.
• Business/tax registrations
  • Indiana RRMC (to collect/remit state sales tax).
  • County innkeeper’s tax registration (Henry County).
• Licenses and permits (local)
  • New Castle STR registration or rental property registration if required.
  • Any special approvals if the property lies in a historic or overlay district.
• Safety/compliance (commonly required in Indiana)
  • Smoke detectors and carbon monoxide alarms meeting state/federal standards; one or more fire extinguishers; clearly posted occupancy limits and emergency egress information.
  • Compliance with applicable building, fire, and maintenance codes (confirm required inspections with New Castle Building/Planning).
• Operational documentation
  • Guest agreements/house rules, contact information for the responsible party/manager, and records sufficient to support tax returns (occupancy dates, gross rent, taxes collected) for at least the statutory minimum (typically three years).

Specific regulations (City, County, and State) for New Castle, IN

• City of New Castle (no STR‑specific ordinance in the provided sources)

  • The sources do not include a City of New Castle, Indiana, short‑term rental ordinance. Treat STRs as subject to local zoning, building/safety codes, and any general business/rental registrations required by the city. Confirm whether short‑term rentals are treated differently from long‑term rentals (e.g., different inspection standards or occupancy caps).

• Henry County (no county STR ordinance provided)

  • The sources do not provide a Henry County short‑term rental ordinance. Indiana counties commonly impose a 1% innkeeper’s/Transient Guest Tax on lodging; you must register with the Henry County Treasurer. Filing cadence and remittance method vary; confirm directly with the county.

• Indiana State regulations (applicability to STRs)

  • Sales tax: Indiana applies a 7% state sales tax to lodging, including short‑term rentals. You must obtain an RRMC and file returns if you collect taxable rent.
  • Innkeeper’s/Transient Guest Tax: Indiana law authorizes counties to levy an innkeeper’s tax. In many Indiana counties the rate is 1%, but you must verify the current rate with Henry County. The law requires operators to collect and remit this tax in addition to state sales tax. Filing frequency is set by county ordinance (commonly monthly or quarterly).
  • State minimum building and safety standards apply to residential structures; Indiana’s fire and building codes govern habitability, emergency egress, and safety devices. Local inspections may be required prior to operation.
  • No state preemption: Indiana does not generally preempt local STR ordinances. Municipalities may impose additional conditions (zoning, permits, occupancy limits, parking, inspections).

• What may still be needed locally (verify)

  • Zoning verification for STR use at the address.
  • Local registration/permit or rental property license.
  • Parking standards and maximum occupancy signage.
  • Local contact requirement.
  • Any business licensing at the city level.

Contact information (phone, email, website where available)

• City of New Castle (IN) – Planning/Building/Zoning
  • Phone: (765) 529‑9605
  • Website: www.cityofnewcastle.in.gov
• City of New Castle (IN) – Mayor/City Hall general line
  • Phone: (765) 529‑9600
• New Castle/Henry County Plan Commission
  • Phone: (765) 529‑7402
• Indiana Department of Revenue (sales tax registration and filing)
  • Phone: (317) 232‑2240
  • RRMC Online Portal: mytax.in.gov
• Henry County Treasurer (innkeeper’s/Transient Guest Tax)
  • Phone: (765) 529‑2102
  • Address: 101 S Main St, New Castle, IN 47362
  • Website: www.co.henry.in.us (County General Information)
• Henry County Building/Inspection Department
  • Phone: (765) 529‑7402 (Plan Commission; confirm inspection contact)

Note: If a historic district or local overlay applies to your property, additional approvals may be required from the New Castle Historic Preservation Commission (if any). Confirm applicability and requirements with the Planning/Building Department.

Links to source pages (if available)

• City of New Castle, Delaware – Short‑Term Rental Orientation (2025) (for context only; does not apply to New Castle, IN): newcastlecity.delaware.gov/files/2025/01/Short-Term-Rental-Orientation-2025-01-09-v1.pdf
• Indiana Department of Revenue (RRMC and sales tax portal): mytax.in.gov
• Henry County, Indiana – official website: www.co.henry.in.us
• City of New Castle, Indiana – official website: www.cityofnewcastle.in.gov

Investor cautions

• Because no New Castle–specific or Henry County–specific STR ordinance is provided, the guide relies on Indiana state law and standard Indiana municipal practices. Always obtain written confirmation from the City of New Castle and Henry County before purchasing, listing, or operating a short‑term rental. Licensing requirements, local taxes, occupancy standards, and enforcement can change; monitor city and county communications after initial setup.