Is Airbnb Legal in Malaysia? Short-Term Rental Rules 2026
Property Lab editorial teamPublished 12 min read
Key points
- As at October 2026, Malaysia has no national law that bans or licenses Airbnb-style short-term rentals; KPKT's national STRA guidelines are still a draft.
- Malaysia's Federal Court held on 5 October 2020 (Verve Suites, Mont Kiara) that a condo management corporation can pass a by-law banning short-term rentals.
- Penang's short-term rental by-law took effect on 1 August 2026: operators need a council licence, from RM1,000 a year, and island residential strata is excluded.
Contents
As at October 2026, Airbnb and other short-term rentals are not banned by any national law in Malaysia, and there is no national licence either. Whether your unit can take guests depends on your council, your building's by-laws and, if you rent the home, your landlord; national short-term rental accommodation (STRA) guidelines are still a draft.
Short-term letting is legal in many places, but not everywhere. Penang now requires a council licence and bars it in residential strata on the island, and any condo's management corporation can pass a by-law banning it. Foreign guests pay RM10 tourism tax per room per night.
Key numbers (as at October 2026)
- National STRA guidelinesDraft
- Proposed night cap180 nights
- Tourism tax per roomRM10/night
- Penang licence, 1-3 roomsRM1,000/yr
- Penang yearly unit feeRM1,800
- Strata by-law breach fineUp to RM200
Also called: short-term rental (STR), short-term rental accommodation (STRA), short-stay, sewaan jangka pendek, holiday homes (DOSM's term), TIP (Penang's term for private homestay), cukai pelancongan (tourism tax). MOTAC's registered Homestay programme is a separate scheme.
Is Airbnb legal in Malaysia in 2026?
In Malaysia, no federal Act bans or licenses Airbnb-style letting as at October 2026; local councils, state rules and strata by-laws decide whether a particular unit may take short-stay guests.
On 26 October 2026, Deputy Housing and Local Government Minister Aiman Athirah Sabu told the Dewan Rakyat that KPKT, through PLANMalaysia, is drafting national STRA guidelines with the Tourism Ministry (MOTAC), states and councils, Bernama reported. After final review with MOTAC, the draft goes to the Cabinet and the National Council for Local Government (MNKT); only then would states and councils adopt it.
- Licensing: only premises registered and licensed by the council would operate (MOTAC said the same in September 2025).
- Platforms: booking sites would check licence status before listing and remove unlicensed units.
- Night cap: a 180-night limit is proposed and still under assessment (The Star, 26 October 2026).
- Existing powers: councils can already act under the Town and Country Planning Act 1976, the Street, Drainage and Building Act 1974 and local by-laws.
Until the guidelines are adopted, the night cap and platform checks are proposals, not law.
Short-term rental rules by state
Short-term rental rules in Malaysia differ by state and council; Penang is the only state we found with a dedicated licensing by-law in force as at October 2026.
| Place | Rule | Status | Source date |
|---|---|---|---|
| Federal | STRA guidelines | Draft | 26 Oct 2026 |
| Penang | Licence by-law | In force 1 Aug 2026 | 21 Aug 2026 |
| Penang Island | Residential strata | Not allowed | 21 Aug 2026 |
| Seberang Perai | Own procedure | Under review | 21 Aug 2026 |
| Kuala Lumpur | DBKL registration | Free, from 2018 | 19 Jan 2018 |
| Selangor (MBPJ) | Short-stay guideline | Planned for 2020 | 15 Nov 2019 |
| Sabah | Condo ban idea | Under study | 27 Sep 2023 |
| Any strata scheme | By-law ban | Allowed | 5 Oct 2020 |
Bernama and NST give the Penang by-law slightly different English names. DBKL said in January 2018 that failing to register would be an offence; we found no newer KL-wide rule. We could not confirm what followed MBPJ's planned 2020 guideline or Sabah's 2023 proposal, and found no state rule for Johor or Melaka. Check with your council before you list.
Penang: what the 2026 by-law requires
Penang's short-term rental by-law took effect on 1 August 2026 and requires every private short-stay operator to hold a city council licence, state local government committee chairman H'ng Mooi Lye said on 21 August 2026, giving operators two months to apply; Malay Mail reported that enforcement starts on 1 November 2026.
- Fees: RM50 per application, RM1,000 a year for up to three rooms plus RM200 for each extra room, and a yearly private lodging fee of RM1,800 per unit. The Star and Malay Mail report that the extra-room charge applies to two extra rooms at most, so it stops at RM1,400.
- Where (island): no residential strata. Serviced apartments, SOHOs and shop offices may be considered, and landed homes with change-of-use planning approval (NST).
- Penalty: a fine of up to RM2,000, jail of up to one year, or both.
Worked out in Python, a three-room unit pays RM2,850 in its first year (RM50 + RM1,000 + RM1,800). MBPP received 364 complaints about illegal operators from 2020 to March 2026, and MBSP 24.
Penang's 2023 strata guidelines (FMT, May 2023) required a 75% yes vote at a general meeting for commercial strata units, and capped letting at 180 days a year and three days a week. Ask MBPP whether those conditions still apply.
Can a condo's JMB or MC ban Airbnb?
Yes: in 2020 Malaysia's Federal Court held that a strata management body can pass a by-law banning short-term rentals, even where the land title allows commercial use.
The case is Innab Salil & Ors v Verve Suites Mont' Kiara Management Corporation, decided on 5 October 2020. Verve Suites' land title allows commercial service apartments. Its MC passed House Rule No 3 at an extraordinary general meeting, by 96 votes to 4, banning business use of units, including short-term rentals, and sued owners who kept letting.
According to the Skrine case note, the Federal Court dismissed the owners' appeal and held that:
- Title conditions: a commercial land-use condition does not stop an MC from adding by-laws under section 70(2) of the Strata Management Act 2013.
- Licence, not lease: the Airbnb-type stays were licences, not tenancies, so they were not "dealings" that section 70(5) protects from restriction.
- Council letter: a DBKL letter saying short-term rental was not barred was non-binding advice, while the house rule had force under the Act.
The ruling is not a nationwide ban: each building's by-laws decide. Zaid Ibrahim's note says it covers JMBs too, and The Edge reported it reaches stratified townhouses and gated landed homes. For the area itself, see our Mont Kiara vs Bangsar guide.
What strata by-laws already say about guests
Even without an Airbnb rule, the standard Third Schedule by-laws of the Strata Management (Maintenance and Management) Regulations 2015 bind owners, tenants and occupiers: by-law 8(8) bars using a parcel in a way that causes nuisance or danger, by-law 10(2) makes owners take reasonable steps over invitees' behaviour, and by-law 10(3) asks for low volume after 11pm.
Under section 70(2), extra by-laws need a special resolution and may carry a fine of up to RM200; the Court of Appeal held the Verve Suites MC could not add RM200 for each day of breach. For service charges, see our Maintenance Fee vs Sinking Fund guide.
Before buying a unit to let short term, ask the management office for every additional by-law and house rule, plus the last general meeting minutes. As Verve Suites showed, a ban can come after you buy.
Tourism tax and service tax on short-term rentals
Malaysia charges foreign guests tourism tax of RM10 per room per night under the Tourism Tax (Rate of Tax) Order 2025, in force from 15 December 2025; Malaysians (MyKad) and permanent residents (MyPR) are exempt.
- Platform bookings: since 1 January 2023, registered platforms must charge it on every booking a foreign tourist makes for a stay in Malaysia, whether or not the host is registered (Customs guide, March 2025).
- Direct bookings: operators with four rooms or fewer need not register or collect; larger ones register with Customs and collect at check-in unless the guest shows proof of paying the platform.
So a foreign guest staying three nights in one room pays RM30; a Malaysian pays nothing.
Service tax is separate: a hotel registered under the Service Tax Act 2018 adds 8% (Customs guide example), and Airbnb's Malaysia tax guide (November 2024) puts the registration threshold for accommodation at RM500,000 of services in 12 months. Confirm with MySST.
Do you pay income tax on Airbnb income?
Yes, income from short-term letting in Malaysia is taxable, and LHDN Public Ruling 12/2018 decides whether it counts as rental income or business income.
Letting is rental income under section 4(d) unless the owner actively provides comprehensive maintenance or support services, such as cleaning and repairing lobbies and lifts; the management corporation's services do not count. The ruling does not mention short-term rentals, so ask a tax agent.
- Deductible (4(d)): assessment, quit rent, loan interest, fire insurance and ordinary repairs.
- Not deductible: start-up costs such as first advertising, stamp duty and agent commission.
- If treated as business: capital allowances can be claimed and losses carried forward, according to Airbnb's tax guide.
Non-resident owners pay a flat 30%. Our Rental Income Tax in Malaysia guide covers rates and filing.
Is short-term rental profitable?
No official profit figure exists. DOSM's first holiday homes bulletin (7 July 2026) counted 71,101 holiday homes in 2025, 19,095 of them in Selangor, with estimated revenue of RM2.2 billion. Divided in Python, that is about RM31,000 of revenue per home before cleaning, fees, tax and loan costs, which says nothing about one unit's profit.
How to start a short-term rental legally in Malaysia
- Check the land use: see whether your title and the council's local plan treat the unit as residential or commercial, and ask the council if short stays need approval.
- Read the building rules: get every additional by-law and house rule from the JMB or MC.
- Get the council licence: apply where one exists, as in Penang, and keep the approval letter.
- Get consent if you are a tenant: check the subletting clause and get the landlord's written consent (see our Tenancy Agreement guide).
- Set guest rules: cap guest numbers and follow the 11pm noise by-law.
- Sort out tourism tax: let the platform collect it, and register with Customs yourself if your premises have more than four rooms.
- Check your insurance: ask your insurer in writing whether paying guests are covered.
- Keep records for LHDN: keep payout statements and receipts, and declare the income in your e-Filing.
Frequently Asked Questions
Is Airbnb legal in Malaysia?
No national law prohibits it as at October 2026, but a council, state rule or building by-law can each forbid it for a given unit.
Can my condo management ban Airbnb?
Yes, the 2020 Verve Suites ruling lets a management body make a by-law banning short-stay letting, and owners must follow it.
Is there a new Airbnb law in Malaysia in 2026?
Not at the federal level; KPKT's national guidelines were still being finalised in late October 2026, and the 180-night cap remains a proposal.
Do I need a licence to run an Airbnb in Penang?
Yes, since 1 August 2026 operators need a city council licence, and residential strata units on the island are excluded.
Who pays tourism tax on an Airbnb stay?
Foreign guests pay RM10 for each room each night, usually through the booking platform, while Malaysian citizens and permanent residents are exempt.
Do I pay income tax on Airbnb income?
Yes, it must be declared to LHDN, normally as rental income, though active and comprehensive services can make it business income.
Can a tenant list a rented unit on Airbnb?
Only with the landlord's written consent and if the building allows it, since both the tenancy and the by-laws bind the tenant.
Is Airbnb profitable in Malaysia?
Official data covers revenue only: DOSM estimated RM2.2 billion across 71,101 holiday homes in 2025, before any costs.
References
- Bernama: KPKT moves to standardise short-term rental accommodation rules nationwide (26 October 2026)Used for the draft guidelines, licensing intent, platform checks, existing enforcement laws and the steps to Cabinet and MNKT.
- The Star: Guidelines to regulate short-term rental accommodation being finalised (26 October 2026)Used for the proposed 180-night limit and strata premises staying under JMB and MC by-laws.
- Media Selangor: Short-term rental guidelines at final review stage (6 October 2026)Used for the minister's written reply on the review stage.
- The Vibes: MOTAC on local operating licences for short-term rentals (8 September 2025)Used for MOTAC's statement that operators need a council business licence first.
- The Star: Penang short-term rental operators need local authority licences (21 August 2026)Used for Penang's fees, the RM1,400 cap, the MBPP strata prohibition and complaint numbers.
- Malay Mail: Airbnb crackdown, Penang introduces new licensing laws (21 August 2026)Used for the 1 November 2026 enforcement date and the two-extra-room limit (read in a browser on 27 October 2026).
- NST: Penang tightens short-term rental rules, gives operators 2 months (21 August 2026)Used for the grace period, penalties and which property types may be considered.
- Bernama: Penang private homestay by-law (21 August 2026)Used for the by-law name, the 1 August 2026 start and the June executive council approval.
- FMT: Penang bans almost all short-term rentals on the island (25 May 2023)Used for the 2023 strata guidelines: 75% vote, 180 days a year, three days a week.
- FMT: Sabah mulls banning short-term rentals in condos (27 September 2023)Used for Sabah's proposal, which was still under study.
- Star Property: Renting out your property short-term? Register with DBKL (19 January 2018)Used for DBKL's free registration drive.
- EdgeProp: MBPJ to implement guidelines to monitor short stays (15 November 2019)Used for the planned MBPJ guideline start date.
- Skrine: Federal Court: Management body can stop short-term rentals (23 October 2020)Used for the facts, both questions of law and the Federal Court's reasoning.
- Allen & Gledhill: Federal Court holds house rule prohibiting short-term rentals not in violation of section 70(5) (26 November 2020)Used to cross-check the licence-not-lease reasoning and the DBKL letter point.
- Conventus Law (Zaid Ibrahim & Co): Management bodies fully empowered to ban short-term rentals (23 October 2020)Used for the holding covering both MCs and JMBs.
- The Edge: Getting around apex court ruling on short-term stays (November 2020)Used for the 96-4 vote, the scope to stratified landed homes and lawyers' views.
- Rahmat Lim & Partners: Court of Appeal decision in the same case (29 April 2020)Used for the special resolution route and the ruling against daily fines.
- LawPlayer: Strata Management Act 2013, section 70Used for additional by-laws, the RM200 fine and the limits in subsection (5).
- Strata Management (Maintenance and Management) Regulations 2015 (DBKL copy, PDF)Used for Third Schedule by-laws 8 and 10 and who they bind.
- Tourism Tax (Rate of Tax) Order 2025 (PDF)Used for the RM10 rate for direct and platform bookings from 15 December 2025.
- Royal Malaysian Customs: Panduan Cukai Pelancongan ke atas Pengendali Premis Penginapan (6 December 2024, PDF)Used for who is an operator, the exemptions (four rooms or fewer, MyKad, MyPR, MOTAC homestays) and the service tax example.
- Royal Malaysian Customs: Guide on Tourism Tax (Digital Platform Service Provider) (11 March 2025, PDF)Used for platforms charging on all bookings from 1 January 2023.
- Royal Malaysian Customs: Public Ruling No. 01/2025 (1 December 2025, PDF)Used for no double collection when the guest has paid the platform.
- LHDN: Public Ruling No. 12/2018, Income from Letting of Real Property (copy at ccs-co.com, PDF)Used for the business versus rental test and deductible expenses.
- Airbnb: Malaysia, tax considerations on short-term lettings (November 2024, PDF)Used for the RM500,000 service tax threshold, capital allowances and the 30% non-resident rate; prepared by a law firm for Airbnb, not an official source.
- DOSM: Bulletin of Holiday Homes Statistics, Economic Census 2026 (7 July 2026)Used for the release date and data collection period.
- NST: 71,101 holiday homes generated RM2.2bil revenue in 2025 (7 July 2026)Used for the holiday home count, revenue and state figures.
Short-term rental rules are changing fast, so check KPKT, your council, your management office, Customs (MyTTx) and LHDN for the latest wording before you list a unit.
General information only, not legal, tax or financial advice. Ask a lawyer, a tax agent and your local council before you rent out a property short term.
Sources
- KPKT moves to standardise short-term rental accommodation rules nationwide (26 October 2026) — Bernama
- Tourism Tax (Rate of Tax) Order 2025, P.U. (A) 423 — Royal Malaysian Customs Department (MyTTx)
- Guide on Tourism Tax (Digital Platform Service Provider), 11 March 2025 — Royal Malaysian Customs Department
- Strata Management (Maintenance and Management) Regulations 2015 — Attorney General's Chambers (DBKL copy)
- Federal Court: Management body can stop short-term rentals (23 October 2020) — Skrine
- Penang short-term rental operators need local authority licences as new by-law comes into force (21 August 2026) — The Star
General information only, not legal, tax or investment advice. Rules and rates change; check the official source linked below before you act.
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