Penang Airbnb Rules 2026: Licences, Fees and the Deadline
From 1 November 2026 every Airbnb-style host in Penang needs a council licence. Where short stays are allowed, what it costs, and what guests should check.
From 1 November 2026, anyone renting out a room, house or apartment in Penang to short-stay guests, the Airbnb-style stays known locally as TIP (tempat inap persendirian, private accommodation premises), must hold a licence from their city council. The rules come from the Private Homestay (Penang Local Authorities) By-Law 2026, which took effect on 1 August 2026. Operators had a two-month grace period to apply, and enforcement starts on 1 November.
What the new rules say, which properties can and cannot be used, what a licence costs, and what to check before you book. This is a plain summary of published reports, not legal advice. For your own property, confirm with the council.
Travellers booking an apartment or house in Penang, and hosts who rent one out
The rules at a glance
| Item | Detail |
|---|---|
| Law | Private Homestay (Penang Local Authorities) By-Law 2026 |
| In force | 1 August 2026 |
| Apply by | Before 1 November 2026 |
| Enforcement | From 1 November 2026 |
| Who licenses | Penang Island City Council (MBPP) on the island; Seberang Perai City Council (MBSP) on the mainland |
| Who needs a licence | Every private short-term rental operator, including hosts on Airbnb and similar platforms |
| Penalty | A fine of up to RM2,000, up to one year in jail, or both |
The by-law is aimed at private short-term rentals. Hotels, guesthouses and hostels hold their own business licences.
Where short-term rentals are allowed on Penang island
According to the state government's announcement and reports in The Star and the New Straits Times, MBPP allows licensed short-term rentals in:
- Landed homes on individual title: detached, semi-detached and terrace houses, in general residential and business zones.
- Commercial-type units: serviced apartments, SoHo, SoFo and SoVo units, and suite offices.
- Shops, shophouses and shop offices.
Most of these need planning permission for a change of use from MBPP. Properties inside the George Town World Heritage Site must also follow the site's Special Area Plan.
Where the unit is in a strata building, such as a serviced apartment or a SoHo, reports say the operator also needs approval from the building's Joint Management Body or Management Corporation, passed as a special resolution with at least 75% of valid votes.
Condos and apartments on the island are out
All residential strata properties on Penang island, meaning ordinary condominiums, apartments and flats, are barred from short-term rental. If an island listing is a regular condo unit, it cannot be licensed.
MBPP has also named residential areas where short-term rentals are not allowed, including Jesselton Heights, Pearl Hill, Lebuh Bukit Jambul, Taman Sungai Ara and Minden Heights, plus other streets listed in its guidelines.
Where they are not allowed anywhere in Penang
On both the island and the mainland, short-term rentals are banned in:
- Low-cost, low-medium-cost, affordable and controlled-price homes, and People's Housing Projects (PPR)
- Government or statutory-body premises
- Healthcare and childcare centres
- Workers' hostels
- Private educational institutions
Seberang Perai (the mainland)
MBSP licenses short-term rentals on the mainland. Reports differ on the detail: one property site lists a wider range of allowed properties there than on the island, including apartments, condominiums and landed strata, while The Star reported that MBSP's criteria were still being finalised. If your property is on the mainland, check with MBSP directly.
What a licence costs
| Fee | Amount |
|---|---|
| Application (administration) | RM50 per application |
| Annual licence, up to 3 rooms | RM1,000 |
| Each additional room (maximum 2 extra) | RM200 a year |
| Annual private accommodation fee | RM1,800 per unit |
| Reminder notice for late payment | RM5 per notice |
So a small unit with up to three rooms pays about RM2,800 a year in licence and accommodation fees, plus the one-off RM50 application. Licensees must also meet conditions on operations, cleanliness, safety, prohibited activities and nuisance, and the councils can inspect premises and close down those that break the rules.
Why Penang brought this in
MBPP received 364 complaints about public nuisance and safety from illegal short-term rentals between 2020 and March 2026, and MBSP received 24. Penang is the first state in Malaysia to enforce a private homestay by-law of this kind. The Malaysia Budget & Business Hotel Association (MyBHA) has backed the rules; some short-term rental operators have called the fees too high.
If you are a guest: what to check before you book
- Ask the host for their council licence number. From 1 November, a legal Penang short-term rental should have one.
- Be wary of ordinary condo units on the island. Residential strata units there cannot be licensed for short stays.
- Hotels, guesthouses and hostels are licensed as businesses in their own right, so this check is mainly for apartment and house rentals.
Browsing places to stay? See our Penang hotels directory and our guide to where to stay in Penang by neighbourhood.
If you are a host
- Apply to MBPP (island) or MBSP (mainland) before 1 November 2026.
- Check your property type and location against the lists above, and whether you need planning permission or your building's JMB/MC approval first.
- Keep your licence number ready to show guests and to add to your listings.
Once licensed, you can add your property to Visit Penang for free.
Not legal advice
This page summarises official announcements and news reports as of 7 October 2026. The by-law and council guidelines are the authority. For your own property, confirm the rules with MBPP or MBSP before you apply or book.
Sources
- The Star, Penang short-term rental operators need local authority licences as new by-law comes into force, 21 August 2026
- New Straits Times, Penang tightens short-term rental rules, gives operators 2 months to register, August 2026
- Malay Mail, Airbnb crackdown: Penang introduces new licensing laws for short-term rentals, 21 August 2026
- The Vibes, Penang is first state to enforce private homestay law
- Penang Property Talk, Penang TIP rules: which properties can be used for short-term stays?, August 2026
- Malaysia SME, MyBHA backs Penang's new short-term rental rules, calls for nationwide enforcement, 24 August 2026
- Business Today, Penang's new short-term rental licensing fee unsustainable for operators, 27 August 2026
Keep reading
Guides that pair well with this one.
Accessible Transport in Penang: What the Operators Say
Wheelchair and step-free travel in Penang, limited to what operators publish: the ETS train's OKU facilities, Butterworth station and Penang Sentral, the ferry, the Penang Hill funicular and airport pick-up. Includes the gaps we couldn't confirm.
4 min readpracticalCycling in George Town: LinkBike Bike Share and Penang's Bike Lanes
Can you cycle around George Town? How Penang's LinkBike bike-share scheme works, what the council says about the island's cycle lanes, taking a bike on the ferry, and the honest downsides.
5 min readpracticalDriving & Parking in Penang: Bridges, Tolls and How to Pay for Parking
Driving in Penang as a visitor: the two bridges and their tolls, island parking rates and the Penang Smart Parking app, the 2025–2026 rule changes, and where you can and can't park at the big sights.
6 min readpracticalLiving in Penang: The Expat Guide to Moving Here
Penang is consistently ranked among Asia's best places for expats to live. This guide covers cost of living, neighbourhoods, healthcare, international schools, and the practicalities of making Penang your home.
9 min read