Penang Private Accommodation By-Laws 2026:Alan Chia2026-09-14T15:03:05+08:00

What You Need to Know

AT A GLANCE The Private Accommodation (Penang State Local Authority) By-Laws 2026 came into force on 1 August 2026. The By-Laws require operators of private accommodation in Penang to obtain a licence from the relevant local council and comply with specified operational requirements. Non-compliance may result in a fine of up to RM2,000 or imprisonment for up to 1 year, or both.

Why do the new By-Laws matter?

Government of Penang has recently introduced the Private Accommodation (Penang State Local Authority) By-Laws 2026 (“By-Laws”), which came into force on 1 August 2026, to regulate private accommodation activities across Penang Island and Seberang Perai.

The key change is that anyone intending to offer a property for short-term stays in Penang must first determine whether the proposed activity falls within the definition of “private accommodation” under the By-Laws. If it does, the operator must obtain a licence (“TIP Licence”) from the relevant local council before commencing operations, regardless of how the accommodation is marketed or booked. The key requirements are outlined below.

When do the By-Laws apply?

Premises will generally fall within the definition of “private accommodation” where all the following elements are present:

• The premises are provided as accommodation in return for any form of payment;
• The premises have fewer than 5 rooms;
• Each stay does not exceed 6 consecutive months and no landlord-and-tenant relationship is created; and

The accommodation may be booked online or through another booking method determined by the operator.

The licensing framework

Anyone intending to operate private accommodation must first apply for and obtain a TIP Licence from the relevant local council, depending on where the premises are located.

Requirements	Particulars
Licensing authority	City Council of Penang Island (MBPP) for premises located on Penang Island and City Council of Seberang Perai (MBSP) for premises located in Seberang Perai.
Validity of licence	The Council will determine the validity period of the licence, subject to a maximum of 3 years.
Eligible operator	The operator must be a Malaysian citizen or a Malaysian company owned by Malaysian citizens. The operator must also be registered with the Companies Commission of Malaysia (SSM) and have valid documents showing ownership of the premises.
Eligible premises and location	The premises must comply with the By-Laws and the applicable requirements relating to location, property type, zoning and planning approval, as discussed below.

A TIP Licence cannot be issued for certain excluded premises, including regulated private healthcare or childcare facilities, workers’ hostels, private educational hostels, low-cost and medium-low-cost homes, price-controlled homes and Federal or State People’s Housing Projects.

The relevant local council may also refuse an application if the premises are unsuitable, fall within a prohibited category or were constructed without its approval.

Application process

An operator must submit an application to the relevant local council in the prescribed form, together with the required supporting documents and fees. The applicable fees include, amongst others, the following:

Fee	Amount
Administrative fee	RM50 for each new/renewal application
Annual licence fee	RM1,000 for premises with fewer than 3 rooms (RM200 for each additional room, up to 2 additional rooms)
Annual private accommodation fee	RM1,800 for each private-accommodation unit

The local council may impose conditions when granting or renewing a licence. It may also add, amend or revoke those conditions by written notice.

Where may private accommodation operate?

Before applying for a TIP Licence, the first question is whether the property qualifies. The By-Laws broadly state that private accommodation must be located within a “residential and commercial area” and may operate throughout the year. However, this does not mean that every residential or commercial property is automatically permitted.

The detailed requirements depend on where the property is located. For properties on Penang Island, the MBPP Guidelines set out the applicable land-use zones, permitted property types and excluded areas. Operators must also check the property’s existing planning and building approvals and any restrictions affecting the area.

The position under the MBPP Guidelines is summarised below:

Category	Permitted	Not Permitted
Land-use zone and location	Perumahan Am, Perniagaan Am and Perniagaan Terhad, subject to the applicable zoning and planning requirements	Jesselton Heights; the identified area covering Jalan Utama, Jalan Gottlieb, Jalan Burma, Jalan Brother James, Jalan Cantonment and Jalan Nunn, including Jalan Tunku Abdul Rahman, Lebuhraya Rose, Rose Avenue, Jalan Park, Jalan Brown, Jalan D.S. Ramanathan; Jalan Bell; Pearl Hill; Lebuh Bukit Jambul; Taman Sungai Ara; and Minden Heights
Commercial property—individual or strata title	Serviced apartment, Small Office Home Office (SOHO), shop, shophouse and shop office	–
Residential property	Detached house, semi-detached house and terrace house held under an individual title	All residential strata properties

Being listed as a permitted property type does not automatically mean that the property may be used for private accommodation. The property must still comply with MBPP’s planning and building requirements. For example, landed residential properties generally require approval from the local council to convert the approved building use from residential to commercial use.

Commercial strata properties also remain subject to the additional by-laws and house rules imposed by the relevant Joint Management Body or Management Corporation.

For properties in Seberang Perai, MBSP has not issued corresponding detailed guidelines under the new By-Laws as at the date of writing. Operators should therefore check the applicable property, planning and licensing requirements directly with MBSP before applying for a TIP Licence or commencing operations.

What are the obligations of the licensee?

Throughout the licence period, the licensed operator must continue to comply with the By-Laws, the conditions of the licence and all applicable operational requirements. Key duties include, amongst others, the following:

Area	Key duties
Guest records	Maintain a guest register containing each guest’s name, nationality, address, telephone number, check-in and check-out dates and a copy of the guest’s passport or identity card, together with any other information required by the licensing officer.
Health	Promptly report any notified infectious disease to the relevant licensing and health officers, comply with any quarantine or evacuation directions and sanitise any premises occupied by an infected guest.
Hygiene and structure	Keep the premises clean, adequately lit and ventilated and free from any unauthorised structural alteration or addition.
Water supply	Ensure that an adequate water supply is available at all times.
Fire safety	Provide sufficient, functional and unexpired firefighting equipment; keep all stairs, passages and exits clear; and ensure that internal doors can be opened easily.
First aid	Provide a complete and unexpired first-aid kit and keep it in an easily accessible location.
Prohibited conduct	Take reasonable steps to prevent unlawful activities and nuisance at the premises. The prescribed notice must be displayed in both Bahasa Malaysia and English.
Display of licence	Display the valid licence prominently at the premises and produce it for inspection when requested by an authorised officer.

What should you do next?

With the new By-Laws now in force, operators, developers, Joint Management Bodies and Management Corporations should consider how private accommodation activities may affect their properties or developments.

Operators should first confirm that the property and location qualify, obtain any required planning or conversion approval and prepare the necessary documents and fees before applying for a TIP Licence. Developers should consider these requirements at the planning stage of a new project, particularly if private accommodation activities are intended. Joint Management Bodies and Management Corporations should also review their additional by-laws and house rules and establish a clear process for dealing with such activities.

Addressing these requirements early will help developers plan suitable projects, operators avoid investing in properties that may not qualify, and management bodies put appropriate rules and procedures in place before private accommodation activities begin.

*Disclaimer: This update is for informational purposes only and does not constitute legal advice nor an expression of legal opinion. For assistance with legal matters, please contact us. While we have made every attempt to ensure the correctness and accuracy of the information contained in this update, we are not responsible for any errors or omissions, or for any liabilities, damages or losses from the use of this information. You should not act or refrain from acting on the basis of any content included in this update without seeking legal or other professional advice.