Can I rent out my condo short-term in Penang? Airbnb, homestay and the 2026 by-law

The short version

On Penang island a residential strata home has no route to a licence. Everywhere else you still apply to your council: 1 November 2026 was the end of the grace period before enforcement, not a cut-off for applying.

If your condo or apartment is residential strata on Penang island (the MBPP area), you cannot get a licence to rent it out short-term: the island council's planning guideline bars all strata residential homes, according to the state's local government chairman. If you own a serviced apartment, SOHO or other commercial-title unit, read the island section below ("On the island: condos and flats are out"), because those may be considered. If it is on the mainland (the MBSP area), strata homes are not barred in the state's description, but you need a council licence and your building's owners must vote to allow it.

• Who the by-law covers: paid stays of up to six consecutive months with no tenancy, in premises with fewer than five rooms that can be booked online. An ordinary tenancy is a different thing.
• Licence date: the state gave owners a two-month grace period, to 1 November 2026, to apply before enforcement. On 3 November Buletin Mutiara reported that by-law amendments (restructured fees, a higher maximum number of rooms) are being gazetted and are expected to take effect on 1 January 2027. No new application date or fees have been published; check with MBPP or MBSP before you apply or pay.
• Council lines: MBPP hotline 04-263 7637 or 04-263 7000 (WhatsApp 016-2004082); MBSP call centre 04-269 6969 in office hours, or aduan@mbsp.gov.my (sources: MBPP Hotline, MBSP home page). More on who answers what: A neighbour is running an Airbnb in your building.
• Penalty: a fine of up to RM2,000, up to one year in jail, or both.
• Which buildings qualify: no council or state page lists them, so ask the council about your title and zone.

The councils decide each case.

What counts as a short-term stay

The by-law is the Private Accommodation (Penang State Local Authority) By-Laws 2026, in force from 1 August 2026 (the Malay title says Tempat Inap Persendirian, often shortened to TIP). The gazette defines "private accommodation" as premises that:

• are let for payment of any kind;
• have fewer than five rooms;
• are lodged for no more than six consecutive months, with no tenancy relationship between a landlord and a tenant; and
• can be booked online, or by another way the licence holder sets.

The by-law applies in the areas of both city councils, and nobody may run such an activity without a valid licence. Whether a monthly stay counts as a tenancy is not defined, so ask the council.

Source: Penang State Gazette, P.U. 37, read 2026-11-03.

On the island: condos and flats are out

The Star, the New Straits Times and Buletin Mutiara all report the state's local government chairman, Jason H'ng Mooi Lye, saying that MBPP's planning guideline does not allow any kind of strata residential property to operate as a short-term rental. The guideline was approved by the state planning committee on 3 August 2026.

What MBPP's guideline may allow, subject to planning approval:

• Commercial buildings such as serviced apartments, small office home offices (SOHO), shops, shophouses and shop offices.
• Landed homes with their own title (detached, semi-detached, terrace), if the owner applies to MBPP for planning permission to change the use of the building.
• Zones: general residential, general business and limited business land. Inside the George Town World Heritage Site the Special Area Plan applies.
• Not allowed at all: named estates (Jesselton Heights, Pearl Hill, Lebuh Bukit Jambul, Taman Sungai Ara and Minden Heights) and several listed road areas.

On 3 November Buletin Mutiara reported that the state agreed, after a meeting on 28 September, to extend private accommodation to the George Town World Heritage Site, and that MBPP is preparing a guideline for it that sets the permitted share of operation.

For a serviced apartment, the NST reports the chairman saying the management corporation's (MC, the owners' body that runs a strata building) house rules also apply, and the MC has a say in whether short-term rental is allowed.

Sources: The Star, NST and Buletin Mutiara (21 August and 3 November), read 2026-11-03.

On the mainland (MBSP): no blanket ban reported

The Star reports that the by-law permits short-term rental in residential and commercial areas of the MBSP area, and that MBSP will review its own procedures, including whether to set specific criteria or suitable areas. Penang Property Talk, as reposted on Newswav and repeating the state's statement, lists apartments, condominiums and townhouses among the types allowed in the MBSP area.

Because MBSP is still reviewing, do not assume your building is cleared. Ask MBSP before you list. Which council is yours is on MBPP or MBSP: which is yours.

Sources: The Star and Penang Property Talk (via Newswav), read 2026-11-03.

Barred everywhere in Penang

The gazette says no licence may be issued for premises run by the federal or state government or a statutory body, private health or child care centres, workers' hostels, student hostels of private schools and colleges, and low-cost, medium-low-cost, price-controlled and other People's Housing Project homes.

Source: Penang State Gazette, P.U. 37, read 2026-11-03.

Your building must agree too

Penang Property Talk, as reposted on Newswav, reports that owners or operators must also obtain approval from the building's JMB (joint management body) or MC. A JMB or MC is the owners' body that runs a strata building. It reports that the application goes to a general meeting and needs a special resolution of at least 75% of valid votes. The gazette does not mention strata or JMB approval.

MBSP's Commissioner of Buildings FAQ (undated) gives a different test when asked whether an owner can use a unit as a homestay: yes, if a majority of owners approve at a general meeting and the building's by-laws allow it, and it points to the guideline issued. The FAQ has no date and may predate the 2026 by-law.

See Condo and strata living in Penang for how the JMB, MC and Commissioner of Buildings work.

Sources: Penang Property Talk (via Newswav) and MBSP Commissioner of Buildings FAQ, read 2026-11-03.

If you run one without a licence

The gazette sets the penalty for breaking any part of the by-law at a fine of up to RM2,000, up to one year in prison, or both. Nobody can be prosecuted without the Public Prosecutor's written consent, and the Mayor may compound an offence (settle it for a payment instead of a court case) with that consent. The councils may inspect, enter and close premises.

The state has said it traces operators through Agoda, Airbnb and other platforms, and through complaints from neighbours. Costs and steps for those who can apply are on Short-term rental licence in Penang: steps and fees.

Sources: Penang State Gazette, P.U. 37 and NST, read 2026-11-03.

Related

• Short-term rental licence in Penang: steps and fees
• A neighbour is running an Airbnb in your building: what you can do
• Condo and strata living in Penang
• MBPP or MBSP: which is yours