GEORGE TOWN: Penang's amended Private Short-term Accommodation (Local Authorities of Penang) By-laws 2026 will take effect on Jan 1, 2027.
The amendments include revised licensing fees aimed at making compliance more affordable for short-term rental operators.
State Local Government Committee chairman Hng Mooi Lye said the amendments followed feedback from industry players and were intended to establish a more practical regulatory framework while safeguarding public safety and residents' well-being.
Under the revised provisions, the annual licence fee will be RM500 per unit, replacing the previous RM1,000 fee for units with up to three rooms, with additional charges previously imposed for extra rooms.
The annual fee will also be adjusted according to the number of rooms, with operators paying RM400 for one room, RM600 for two rooms, RM800 for three rooms and RM1,000 for four rooms.
Premises with five to 10 rooms will be charged RM1,800 annually.
The amendments also clarify the distinction between private accommodation and hotels to prevent hotel operators from reclassifying their premises as short-term rentals to circumvent hotel licensing requirements.
Hng said the changes were approved by the state executive council on Oct 19, adding that both local authorities would refine their guidelines and operating procedures ahead of implementation.
"Operators will also be required to comply with safety conditions, including public liability insurance requirements, to ensure short-term rental premises are properly monitored and managed.
"Separately, operators running Airbnb-style accommodation in landed residential areas under the Penang Island City Council (MBPP) will be given a three-year grace period before they must fulfil planning requirements for a change of use from residential to commercial," he told reporters at his office in Komtar.
Elaborating, Hng said operators would also be required to obtain the agreement of neighbouring properties, subject to the relevant local authority requirements.
He said the state government's approach was to bring short-term rental operators into a regulated system while ensuring their businesses did not compromise the safety, peace and well-being of surrounding communities.
Hng said local authorities would take action against operators who failed to comply with licensing requirements once the amended by-laws took effect on Jan 1, 2027.
"Compounds of up to RM1,000 could be imposed, while further legal action, including possible prosecution and seizure permitted by law, can also be pursued.
"The objective of these by-laws is not to impose compounds, but to ensure that short-term rental operations are properly monitored and regulated," he said.
In August, Penang introduced new licensing rules for short-term rentals, giving operators a two-month grace period to register before enforcement began.
The new Private Short-term Accommodation (Local Authorities of Penang) By-laws 2026 came into force on Aug 1, giving local councils clearer powers to regulate short-term accommodation, including Airbnb-type operations.
Penang Malaysia Homestay/Short-Stay Operators Association chairman Lydia Tan welcomed the revised framework, saying the lower fees would ease operators' financial burden and make legal compliance more achievable.
She said their earlier concerns centred on the cumulative financial burden of an annual fee of RM1,800 per unit and a licensing fee of RM1,000 or more.
"The revision is a positive outcome of discussions with the state government. Regulations should encourage operators to enter the legal framework rather than make compliance commercially unviable," she added.
She also urged the state to consider a multi-unit licensing arrangement allowing one licence to cover several properties managed by the same registered operator.
She also called for the establishment of a short-term rental industry working committee comprising operators, government representatives and relevant authorities to facilitate regular discussions on regulatory issues.
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