Is Airbnb Legal in Chicago? 2026 Rules, Permits & Taxes

Registration required

Yes

Taxes on a stay

23.21%

Fine for hosting without a permit

$10,000

Listings showing a permit number

82%

Latest rule change

Jul 1, 2026

Listing figures: AirROI, 12 months to September 2026. A number on a listing doesn't prove the permit or license is valid, and a missing one doesn't prove there is none.

The rules in brief

Who needs it

Every host who rents a home, or part of one, for 31 days or fewer, with a separate registration for each dwelling unit; a host approved for more than one unit also needs a Shared Housing Unit Operator License.^{1,3,7,8,9,23,24}

Issued by

City of Chicago Department of Business Affairs and Consumer Protection (BACP)

Valid for

One year. Renewal opens two months before the expiration date, and a registration cannot be transferred to another unit or host.

Processing

Several weeks, depending on the number of applications.

On listings

The number must appear on every listing

Platform checks

Chicago's licensed platforms may not process a booking for an unregistered unit, and the city gives them a list of ineligible units; the registration number must be in the listing.

Fees

Who qualifies

• A legal dwelling unit with six or fewer sleeping rooms, registered by a host who is a natural person
• Single-family home or building of 2-4 units: the host's primary residence (lived in at least 245 days a year), with one active rental
• Building of 5 or more units: need not be the primary residence; up to one-quarter of the units or 6, whichever is fewer
• Not in a Restricted Residential Zone and not on the Prohibited Buildings List
• No ban in the rental agreement, condominium bylaws or homeowners association rules
• Not a conversion unit or a coach house established after May 1, 2021

How to apply

1. 1 Check the common eligibility criteria and, if wanted, take the city's unofficial eligibility quiz.
2. 2 Create an account on the Shared Housing Registration Portal in the name on your government-issued identification, enter the account address and upload a valid identity document.
3. 3 Submit the application; a host who lives in the unit adds two primary-residency documents (an owner usually shows a Cook County homeowner exemption).
4. 4 If the city approves the application, pay the $250 registration fee on the portal; if it denies it, appeal or request a commissioner's adjustment as the denial letter explains.
5. 5 Add the registration number to every listing on the platforms named in the approval letter, and renew each year.

Permit rules

Registration number for rentals of 31 days or fewer

Every shared housing unit needs an approved city registration number before it can be advertised, listed or rented, with a separate registration for each dwelling unit.^1,8

Registration number on every listing

The number must appear in every advertisement, platform listing, rental agreement and booking, and a host may not advertise or list the unit while the application is pending.^1,24

Annual renewal

Every registration is renewed each year; renewal opens two months before the expiration date, and the city notifies hosts when it opens.⁸

Operator license for more than one unit

A host approved for more than one registration needs one Shared Housing Unit Operator License ($500 for two years since 1 January 2026), plus a separate registration for each unit; the building commissioner may inspect an operator's units at least once every two years.^4,8,23

Licensed platforms cannot process unregistered units

A licensed platform may not process a booking for a shared housing unit that has not been registered, and it must collect the city hotel accommodation tax and send it to the city with each rental.^7,8

Platforms report to the city every month

Each licensed platform sends the city a monthly report on every Chicago rental it lists, with the registration number, address, nights rented, rent paid and tax paid.⁷

Platforms remit the state tax from July 1, 2026

Since July 1, 2026 a hosting platform with $100,000 or more of Illinois receipts in the prior 12 months is the hotel operator for the state tax and registers and remits it instead of the host.¹⁷ In force since July 1, 2026

Advertised price must be the total price

Since May 12, 2025 a federal rule requires any advertised price for a short-term rental to show the total price, including mandatory fees; taxes and other government charges may be shown separately.^6,22 In force since May 12, 2025

Primary residence in houses and buildings of up to four homes

In a single-family home or a building of two to four dwelling units the rental must be the host's primary residence, and only one unit in the building may be an active rental.^2,9

What counts as a primary residence

A primary residence is the home where the host lives on a daily basis at least 245 days in the calendar year; an owner shows a Cook County homeowner exemption or other accepted documentation, and without the exemption the city presumes the home is not a primary residence.^1,10

Buildings of five or more units: up to a quarter of the units or six

In a building of five or more units the rental need not be the host's primary residence, but no more than one-quarter of the units, or six, whichever is fewer, may be shared housing units or vacation rentals.^2,9

No new rentals in Restricted Residential Zones

A unit cannot be registered inside a Restricted Residential Zone, a precinct where voters petitioned (25% of registered voters) and the City Council barred new shared housing; a zone lasts four years and can be renewed, and units already operating there stay lawful until the registration lapses or the unit changes hands.^5,9,10,12

Buildings can opt out entirely

A building owner, condominium association or cooperative board can put the whole building on the Prohibited Buildings List, which holds 2,412 entries; units in those buildings cannot be registered.^3,9,13

Lease and association bans apply

A unit cannot be listed where the rental agreement, condominium bylaws or homeowners association rules prohibit short-term shared housing.^2,9

Commissioner's adjustment for an exception

A host who does not meet the primary-residence rule can ask the commissioner for an adjustment with a $360 review fee; it is granted only to remove an extraordinary burden, and the commissioner decides within 60 days after asking the local alderman for a recommendation.²

Six sleeping rooms or fewer

A shared housing unit must be a legal dwelling unit with six or fewer sleeping rooms.^1,9

Two-night minimum

Hosts may not rent a unit or any part of it for fewer than two consecutive nights, never by the hour or for under 10 consecutive hours, and may not rent it twice within 48 hours.^2,24

Two guests per guest room

Occupancy is capped at two persons per guest room, not counting a guest's children under 18, or at the capacity the building code allows if that is lower; the city tells the host the limit when it issues the number.²

Smoke alarms and carbon monoxide detectors

Hosts must keep the unit in compliance with the laws on working smoke alarms and carbon monoxide detectors.²

Local contact and evacuation diagram posted

Near the entrance a host must post the name and phone number of a local contact person, who lives or works in the city, and a diagram of all ways out of the unit and the building.^1,2

Two nuisance incidents in 12 months end eligibility

A unit becomes ineligible to be listed when the commissioner finds two separate incidents of illegal activity or objectionable conditions, such as excessive loud noise between 8 p.m. and 8 a.m., within 12 months.^1,3,7

Registrations cannot be transferred

A registration does not pass to another unit or host, so a buyer or new tenant registers again; a revoked registration stays revoked for at least two years.^1,2

State hotel tax applies to stays under 30 nights

The Illinois Hotel Operators' Occupation Tax applies to sleeping room rentals of fewer than 30 consecutive days, including houses, apartments and rooms rented by hosts.¹⁶

Bookings outside a licensed platform need tax accounts

A host who takes bookings on their own site or another channel that does not remit creates a Chicago tax account for the hotel tax and surcharge, and also registers with the Illinois and Cook County revenue departments.^8,17,19

Median nightly rate, booked nights

$190

Taxes on that night (23.21%)

$44

Guest pays, before Airbnb and cleaning fees

$234

What the host still handles

• A Chicago tax account with the Department of Finance for bookings made on the host's own platform (Form 7520, with the surcharge on Form 7520S)
• An Illinois Department of Revenue Hotel Operators' Occupation Tax account (Form RHM-1) for bookings outside a platform that remits the tax; it also covers the Chicago-area taxes
• A Cook County Department of Revenue registration for bookings outside a platform that remits the county tax
• A Shared Housing Unit Operator License when registered for more than one unit^{8,14,15,17,18,19,25}

• Exceeding the occupancy limit: $5,000 to $10,000 for each offense, and each day the violation continues is a separate offense.³
• Any other violation of the shared housing chapter: $1,500 to $3,000 for each offense, with each day a separate offense.³
• Permitting a nuisance (illegal activity or objectionable conditions) in the unit: $2,500 to $5,000 for each offense; an egregious condition such as overcrowding or a violent act carries $5,000 to $10,000.³
• Advertising or renting a unit in a Restricted Residential Zone: $1,500 to $5,000 for each offense.³
• Revocation: the commissioner can suspend or revoke a registration for any violation, and a revocation lasts at least two years.³
• Operating as a multi-unit host without the operator license: $1,500 to $3,000 for each offense.⁴
• The city can also sue: its June 2026 lawsuit against Airbnb and a high-volume host asks for fines, disgorgement of profits and an injunction.²¹
• State hotel tax: a host who does not pay the tax on Form RHM-1 is assessed the tax due plus penalty and interest.¹⁸

1. September 2026 Not in force
   Ordinances to restrict 24 more precincts introduced

   In September 2026 aldermen introduced 24 ordinances to bar new short-term rentals in 24 more precincts, 23 in the 31st Ward and one in the 15th Ward, each backed by a resident petition the City Clerk had certified.^10,27

2. July 1, 2026
   Platforms register and remit the state hotel tax

   From July 1, 2026 a hosting platform with $100,000 or more of Illinois receipts registers with the Department of Revenue and remits the state and Chicago-area hotel taxes on rentals made through it; the 200-transaction threshold for re-renters was removed.¹⁷

3. June 23, 2026
   City sues Airbnb and a high-volume host

   The city filed a lawsuit in the Circuit Court of Cook County against Airbnb, its affiliate Airbnb Living, LLC and the host Slumber Stay LLC, alleging unregistered units and bookings processed for them; the host had been cited nearly 200 times in 2024 and 2025.²¹

4. May 1, 2026
   Tourism Improvement District charge on large downtown hotels

   From May 1, 2026 licensed hotels of 100 rooms or more in listed downtown ZIP codes pay a 1.5% transaction charge on top of the 4.5% hotel tax; the 6% surcharge on shared housing units is unchanged.¹⁴

5. December 19, 2025
   Council amends the commissioner's adjustment section

   On December 19, 2025 the City Council amended the commissioner's adjustment section; the code now sets a $360 review fee for an exception request.²

6. June 18, 2025 Not in force
   Aldermanic precinct-ban proposal delayed

   An ordinance that would have let an alderman ban new short-term rentals in a precinct without a resident petition was delayed on June 18, 2025 at its sponsor's request after business groups objected; the 25% voter petition remains the route to a Restricted Residential Zone.^5,26

7. May 21, 2025
   Council amends the platform and shared housing chapters

   On May 21, 2025 the City Council amended the intermediary and shared housing chapters, touching the platform reporting rule (which now calls for a monthly report to the city), the listing ineligibility conditions, registration, host duties and unlawful acts.^2,3

Estimate what a Chicago home could earn

1. 1. Municipal Code of Chicago, Chapter 4-14 Shared Housing Units (definitions and registration) · American Legal Publishing for the City of Chicago
2. 2. Municipal Code of Chicago, Chapter 4-14 Shared Housing Units (legal duties and commissioner's adjustments) · American Legal Publishing for the City of Chicago
3. 3. Municipal Code of Chicago, 4-14-050 Unlawful acts and 4-14-090 Penalties · American Legal Publishing for the City of Chicago
4. 4. Municipal Code of Chicago, Chapter 4-16 Shared Housing Unit Operator · American Legal Publishing for the City of Chicago
5. 5. Municipal Code of Chicago, Chapter 4-17 Restricted Residential Zones · American Legal Publishing for the City of Chicago
6. 6. 16 CFR Part 464 - Rule on Unfair or Deceptive Fees · Electronic Code of Federal Regulations
7. 7. Municipal Code of Chicago, Chapter 4-13 Short Term Residential Rental Intermediaries (4-13-235 bookings, 4-13-240 reports, 4-13-260 ineligibility) · American Legal Publishing for the City of Chicago
8. 8. Shared Housing Registrations · City of Chicago Department of Business Affairs and Consumer Protection
9. 9. Shared Housing Registration: Common Eligibility Criteria · City of Chicago Department of Business Affairs and Consumer Protection
10. 10. House Share Guidelines · City of Chicago Office of the City Clerk
11. 11. Active Shared Housing Registrations · City of Chicago Data Portal
12. 12. House Share Restricted Residential Zone Precincts · City of Chicago Data Portal
13. 13. House Share Prohibited Buildings List · City of Chicago Data Portal
14. 14. Hotel Accommodations Tax; Vacation Rental and Shared Housing Surcharge; Tourism Improvement District (7520, 7520S, 7520T) · City of Chicago Department of Finance
15. 15. Excise Tax Rates and Fees · Illinois Department of Revenue
16. 16. Hotel Operators' Occupation Tax · Illinois Department of Revenue
17. 17. FY 2026-33, Hotel Operators' Occupation Tax Changes, Effective July 1, 2026 · Illinois Department of Revenue
18. 18. Publication 106, Hotel Operators' Occupation Tax (August 2026) · Illinois Department of Revenue
19. 19. Cook County Hotel Accommodations Tax Ordinance FAQs · Cook County Department of Revenue
20. 20. Hotel Accommodations Tax Schedule A · Cook County Department of Revenue
21. 21. City of Chicago Sues Airbnb and High-Volume Host for Operating Illegal Short-Term Rentals · City of Chicago Department of Law
22. 22. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions · Federal Trade Commission
23. 23. Business License Fee Updates (fees as of January 1, 2026) · City of Chicago Department of Business Affairs and Consumer Protection
24. 24. Chicago, IL · Airbnb Help Center
25. 25. Occupancy tax collection and remittance by Airbnb in Illinois · Airbnb Help Center
26. 26. Chicago's Push To Increase Control Over STRs Stalls · Bisnow
27. 27. Belmont Cragin residents petition to ban new Airbnbs across most of 31st Ward · Chicago City Wire