By Chan Wei Chao (REN 39846), Team Leader, Bricksmen Team · IQI Realty Sdn. Bhd. · Updated 24 October 2026
Penang is cutting the yearly fees for short-term rental (Airbnb and homestay) operators. A one-room unit that paid RM2,800 a year under the rules introduced in August 2026 will pay about RM900 once the changes take effect on 1 January 2027. The maximum number of rooms per premises also doubles from five to 10.
The amendments to the Penang private short-term accommodation by-laws were approved by the State Executive Council on 19 October 2026 and are being gazetted. Here are the old and new fees, where short-term rentals are allowed on Penang Island and the mainland, and what it means if you are buying a unit to rent out.
Short-term rental fees: before and after
Operators pay two separate annual charges: a licence fee and a private accommodation (TIP) fee.
| Charge | From 1 August 2026 | From 1 January 2027 |
|---|---|---|
| Annual licence fee (unit with up to three rooms) | RM1,000 | RM500 |
| Each extra room on the licence | RM200 | RM200 |
| Private accommodation (TIP) fee | RM1,800 flat per unit | RM400 (1 room) · RM600 (2 rooms) · RM800 (3 rooms) · RM1,000 (4 rooms) · RM1,800 (5–10 rooms) |
| Maximum rooms per premises | 5 | 10, subject to local council conditions |
| Application fee | RM50 per licence application | |
What a typical operator will pay
| Unit | Before (licence + TIP fee) | From 2027 (licence + TIP fee) | Saving per year |
|---|---|---|---|
| 1-room studio or suite | RM2,800 | RM900 | RM1,900 |
| 2-room unit | RM2,800 | RM1,100 | RM1,700 |
| 3-room unit | RM2,800 | RM1,300 | RM1,500 |
These examples assume one licence and one TIP fee per unit, as described in the state’s announcement. Fees for larger premises depend on how many extra rooms are licensed; confirm the final amounts with the gazetted by-law and your local council.
Other changes in the amendment
- Clearer definition. “Private accommodation” is now defined by the nature, use and actual operation of the premises, to stop hotels from relabelling themselves as homestays to avoid hotel licensing rules.
- No easing of enforcement. State Local Government Committee chairman Jason H’ng Mooi Lye said the cuts do not mean the state is relaxing oversight. Unlicensed operators face compounds of up to RM1,000, up to one year’s imprisonment and possible seizure of the premises.
- Industry response. The Penang Malaysia Homestay/Short-Stay Operators Association welcomed the fee cut and asked the state to keep the dialogue going.
Where short-term rentals are allowed in Penang
| Area | Rules |
|---|---|
| Penang Island (MBPP) | Not allowed in any stratified residential property (residential-title condominiums and apartments). May be considered for commercial-title serviced apartments, SOHO units, shops and shop offices, and individual-title landed homes, in general residential and business zones. Several neighbourhoods, including Jesselton Heights, Pearl Hill, Minden Heights and Taman Sungai Ara, are excluded, and George Town heritage zone premises follow the Special Area Plan. Planning permission for change of use is required. |
| Seberang Perai (MBSP) | Allowed in residential and commercial areas under the by-law; MBSP is reviewing its own criteria and suitable areas. |
| Everywhere | Not allowed in low-cost and low-medium-cost housing, price-controlled homes, PPR, workers’ hostels, government premises, and healthcare, childcare or education premises. |
What it means for buyers
Lower fees make short-term rental more affordable to run, especially for one- and two-room suites. But the bigger question for a buyer is whether the unit can be used for short-term rental at all:
- On Penang Island, a residential-title condominium cannot be licensed. Look at commercial-title serviced apartments or SOHO units instead.
- Even where the council allows it, the developer’s sale terms or the building’s house rules can still ban short stays. Some Penang projects already prohibit Airbnb use.
- Affordable units (PN1, PN4, RMKU and similar) can never be used for short-term rental.
- Budget for the licence, TIP fee, tourism tax registration, insurance and management costs when you compare short-stay income with a normal tenancy.
Island serviced suites to consider
These serviced-suite projects fall in the property types MBPP may consider for short-term rental. Each unit still needs council approval, so confirm the title type and the developer’s and management’s rules before buying.
| Project | Area | Indicative price | Notes |
|---|---|---|---|
| G’Vinton | George Town | RM560,500–RM1,931,000 | Fully furnished or semi-fitted suites from 387 sq ft |
| Scott @ Logan | George Town | RM496,800–RM1,664,800 | Fully furnished suites from 338 sq ft |
| Keeperz Suites | Gelugor | From RM820,100 | Studio and dual-key suites of 484–581 sq ft, planned for flexible stays |
| The Crown | Tanjung Tokong | From RM704,000 | Commercial-title serviced apartments, studio to 3 bedrooms, 614–1,851 sq ft |
On the mainland, browse Batu Kawan projects, where MBSP’s rules are more open, and compare running costs with our mortgage calculator.
Frequently asked questions
How much is the Penang short-term rental licence fee from 2027?
The annual licence fee falls from RM1,000 to RM500 per unit, and the annual private accommodation fee changes from a flat RM1,800 to RM400–RM1,800 depending on the number of rooms. A one-room unit pays about RM900 a year in total, down from RM2,800.
When do the lower fees take effect?
From 1 January 2027, after the amendments are gazetted. They were approved by the State Executive Council on 19 October 2026.
Can I run an Airbnb in a condominium on Penang Island?
Not in a residential-title (stratified residential) condominium. MBPP may consider commercial-title serviced apartments, SOHO units and individual-title landed homes in permitted zones, subject to planning approval and building rules.
How many rooms can a Penang homestay have?
Up to 10 rooms per premises from 2027, up from five, subject to conditions set by MBPP or MBSP.
Buying a unit for short-stay or rental income?
I can shortlist Penang serviced apartments with commercial titles and check each project’s rental rules before you book. WhatsApp or call +60 10-313 9113.
Sources
- The Star: Lower licence fees for Penang short-term rental operators under revised by-laws
- Bernama: Penang amends private short-term accommodation by-laws, raises room limit to 10, reduces fees
- Buletin Mutiara: Penang eases licensing costs for short-term rental operators
- 東方日報：槟私人住宿客房上限增至10间 执照费最低500令吉
- The Star: Penang short-term rental operators need local authority licences as new by-law comes into force
This article is general information based on state government announcements and published reports as of 24 October 2026. The amended by-law is still being gazetted, so final fees and conditions may differ. It is not legal advice; check with MBPP or MBSP and your building management before operating a short-term rental. Project prices are indicative and depend on availability.