Chicago

Eligible units

Only a dwelling unit with six or fewer sleeping rooms qualifies.[1] It can't sit in a Restricted Residential Zone or on the Prohibited Buildings List,[2] and the code blocks new licenses in restricted zones unless the rental was a legal use before the zone took effect.[5]

Primary residence

In a single-family home, the unit must be your primary residence, and in a building of 2 to 4 units it must be your primary residence and the only rental in the building.[1] Primary residence means where you live at least 245 days a year.[4] Exceptions cover active military duty and rentals licensed before June 22, 2016, and the commissioner can grant a hardship adjustment after a 60-day review.[1, 5]

Larger buildings

Primary residence isn't required in these buildings.[2] No more than six units or one-quarter of the building's units, whichever is less, can be vacation rentals or shared housing in any combination.[5] A building owner or HOA can prohibit rentals outright, and the code makes your unit ineligible if they do.[1]

Who can hold it

A shared housing host can be an owner or a tenant, but must be a natural person, so an LLC can't register.[3, 4] A vacation rental license is for the owner, meaning someone with 25% or more of the unit.[5] If the unit is leased, the application needs an attestation that the building owner hasn't prohibited rentals.[5]

Registration and licenses

Register each shared housing unit in the city's portal for $125 a year, and post the registration number in every listing.[3, 6] A vacation rental license is $250 for 2 years and needs zoning review and inspections.[7] If you run several registered units, you also need a Shared Housing Unit Operator License, $250 for 2 years, held by a natural person.[6, 11]

Insurance

Vacation rental licensees must carry commercial general liability insurance of at least $1,000,000 per occurrence and name the city as an additional insured.[5]

Listings and ads

Show your registration or license number in every ad and listing.[3, 5] For a vacation rental, leaving the number off creates a presumption that you're unlicensed.[5]

Guest rules

Occupancy can't exceed one person per 125 feet of floor area, and building code may set stricter limits.[12] You can't rent by the hour or for fewer than 10 consecutive hours, serve alcohol to guests or double-book.[12]

Safety and records

Keep working smoke alarms and carbon monoxide detectors, post an evacuation diagram and your local contact's details, and keep guest records for three years.[13]

Local contact

A vacation rental license needs a local contact person with a Chicago residence or office who can answer violations and take fixes.[5] Post their name and phone number at the entrance.[5]

City taxes

Chicago charges a 4.5% hotel accommodations tax plus a 6% vacation rental and shared housing surcharge, 10.5% in all.[8] The surcharge took effect Dec 1, 2018, and payments are due on the 15th of each month.[8]

Who collects

On licensed platforms, the platform remits the city taxes.[6] On private platforms, you must set up your own tax account.[6]

State hotel tax

Illinois's Hotel Operators' Occupation Tax covers sleeping room rentals of fewer than 30 consecutive days, and the state collects the Chicago-area hotel taxes with it.[14] Hosting platforms that meet the re-renter definition have owed it since July 1, 2025,[15] and from July 1, 2026 platforms that meet the marketplace facilitator definition file for all rentals made through them.[14, 16] We didn't find a state page saying whether individual hosts owe it too, so ask the Department of Revenue.

No license

Operating a vacation rental without a license can cost $2,500 to $3,000 per day.[5] A property can't be licensed if a license for it was suspended or revoked for cause in the past 2 years.[5]

Ineligible listings

If you rent an ineligible unit, fines start at $500 to $1,000 within 14 days of notice and reach $5,000 per day at 28 or more days.[12] Failing to remove an ineligible listing costs $1,500 to $3,000 from day 8 and $2,500 to $5,000 per day from day 15.[1]

Suspension and revocation

The city can suspend or revoke a registration for three or more objectionable conditions, three or more illegal acts within 12 months, or a Scofflaw or Problem Landlord listing.[17] It can suspend without notice for up to 10 calendar days if there's an imminent threat to public health, safety or welfare.[17]

Restricted zones

Neighbors can petition to make a precinct a Restricted Residential Zone with signatures from at least 25% of its registered voters.[10] Zones last four years and renew by ordinance, and existing rentals can continue until the license expires or ownership changes.[10]

Prohibited buildings

Building owners, their agents or a condo board's registered agent can ask to put a building on the list, which bars rentals of 31 or fewer consecutive days across the whole property.[18] The city must publish the list.[9]