ADU laws in Indiana

In plain words

Indiana does not have a statewide law that makes towns allow ADUs. An accessory dwelling unit (ADU) is a small second home on the same lot as a house. It might be a basement apartment, a unit over a garage, or a backyard cottage. In Indiana, each city, town and county decides through its zoning. Zoning means the local rules about what you can build where. Some places allow ADUs with limits, such as the owner having to live on site. Others allow only some types, or require a public hearing first. In 2026 the state passed House Enrolled Act 1001. Early drafts would have made towns allow ADUs inside homes. That part was dropped before the bill became law. The final law does three smaller things. First, it gives Indiana a statewide legal definition of an ADU: a self-contained unit no bigger than 1,000 square feet or 75 percent of the main house, whichever is smaller. Second, every county, city and town must hold a public hearing by January 1, 2027. At that hearing it must look at ways to allow more housing, including ADUs, and then report to the state. Third, starting in 2027, permit fees must match the town's real costs. A complete application that meets the local rules must be approved. None of this forces your town to allow an ADU. You may be able to build one if your local rules and your property allow it. Ask your local planning office what the rules are today and whether they will change after the 2026 review.

The rules at a glance

What to do next

1. Call your city, town or county planning and zoning office and ask whether ADUs (sometimes called secondary dwelling units or accessory apartments) are allowed in your zoning district.
2. Ask whether an ADU needs only a permit or a special use or special exception from the Board of Zoning Appeals, which means a public hearing, and what each step costs.
3. Write down local rules on owner occupancy, size, parking, setbacks (how far a building must sit from property lines) and utility connections before you design.
4. Ask whether your community held, or will hold, its HEA 1001 housing review hearing before January 1, 2027, and whether ADU rules may loosen afterward.
5. Check your deed and any homeowners association covenants, since private restrictions can block an ADU even where zoning allows one.
6. If you are on septic, ask your county health department whether the system can serve a second unit.

Grants, loans and tax breaks

• Residential Housing Infrastructure Assistance Revolving Fund (IC 5-1.2-15.5): A state loan fund for roads, water and sewer that serve new housing. Its ranking system gives priority to local governments that have voluntarily changed zoning to allow ADUs and other housing types. It helps towns, not individual homeowners. Program page

What your town still decides

Indiana's counties, cities and towns each write their own zoning under the state's 600 series planning law (IC 36-7-4), so whether an ADU is allowed, and by what process, depends on the community. Some allow attached or internal units as a permitted use and send detached units to the Board of Zoning Appeals for a special use or special exception, which involves a public hearing. Owner-occupancy rules are common in local codes (Indianapolis and Bloomington both have them). The 2026 law adds two new state-level pressures: every county, city and town must hold a public hearing by January 1, 2027 to review ways to add housing, including ADUs, and must report its housing progress to the state every year starting in 2027. Also from 2027, IC 36-7-4-1109(s) says a complete permit application that meets the local rules in effect on the filing date must be granted. Since January 1, 2026, IC 36-7-2.5 (from HEA 1005, 2025) gives towns 3 business days to say whether a building permit application for a one- or two-family home (a Class 2 structure) is complete, 7 business days for plan review once it is complete, and 3 business days to inspect after a request, and lets the applicant use a private plan reviewer or inspector; HEA 1001 adds a fee refund when a town misses those deadlines. Other ministerial permits fall under the 12-business-day rule in IC 36-7-4-1109(r). Ask your building department whether these deadlines apply to an ADU permit. These rules speed up approval where ADUs are allowed but do not make towns allow them.

Examples of local rules

• Indianapolis / Marion County: The consolidated zoning ordinance calls an ADU a 'secondary dwelling unit' and lists it as an accessory use in the dwelling districts (Sec. 743-306.EE in the 2015 Indy Rezone text). That text allowed one per lot with a single-family detached home, required the owner to live in one of the two units, required one extra off-street parking space and a separate entrance, and capped size at 720 sq ft. Later amendments may have changed the size cap; confirm with the Department of Metropolitan Development. Source
• Fort Wayne: City Council approved housing-options amendments on March 25, 2025. An integrated ADU (inside or attached to the home) is permitted in all zoning districts. A freestanding (detached) ADU needs a special use approval from the Board of Zoning Appeals in the AR, R1, R2, R3, RP, MHS, DE and UC districts. One ADU per lot, under 700 sq ft, separate utility meters allowed for integrated units, and private covenants still apply. Source
• Bloomington: ADUs are allowed only on lots whose main use is a single-family home or duplex, one per lot, with no more than two bedrooms. The owner must live in the main home or the ADU, and a deed restriction must bar selling the ADU separately. Attached ADUs can be up to 840 sq ft; detached size caps (840, 580 or 400 sq ft) depend on the zoning district, with a 25-foot height limit and 5-foot side and rear setbacks. Rentals must be registered with the city, and each ADU needs its own site plan review. Source

What we’re still confirming

• Indianapolis's ADU rules (owner on site, a 720 sq ft cap and one extra parking space) come from 2015 code text and may have been amended since; confirm with the city.
• Whether the state's permit deadlines cover every kind of ADU permit, such as one for a unit inside the house, hasn't been confirmed by a state agency.

Laws, bills and citations

This is general information, not legal advice. Your town, village, city or county decides what can be built on your property. If something here looks out of date, email the team.