Penang Doubles Short-Stay Room Limit to 10 and Cuts Operator Fees

Key figures

• Room limit per premises rises from 5 to 10 from 1 January 2027 (EdgeProp, Bernama)
• Licence fee for units with up to 3 rooms: RM500, down from RM1,000, plus RM200 per extra room for up to 2 rooms (EdgeProp, citing Buletin Mutiara)
• TIP fee moves from a flat RM1,800 to RM400 (1 room), RM600 (2), RM800 (3), RM1,000 (4) and RM1,800 (5 to 10) (EdgeProp; same tiers in Bernama)
• State Executive Council approved the amendments on 19 October; gazettement under way (Bernama)
• Under the rules in force since 1 August 2026, operators paid up to RM2,850 a year per unit (The Star, 7 September)

News summary

Penang has amended its Private Short-term Accommodation By-Laws 2026 to raise the maximum number of rooms per premises from five to 10 and to cut fees for smaller operators, EdgeProp Malaysia and Bernama reported on 23 October. The State Executive Council approved the changes on 19 October. They were being gazetted and take effect on 1 January 2027.

According to EdgeProp, citing state bulletin Buletin Mutiara, the annual licence fee for a unit with up to three rooms falls to RM500 from RM1,000, plus RM200 per room for up to two extra rooms. A separate annual TIP fee moves from a flat RM1,800 per unit to a room-based scale: RM400 for one room, RM600 for two, RM800 for three, RM1,000 for four and RM1,800 for five to 10. Bernama gave the same figures but did not separate the two charges.

State Local Government and Town and Country Planning Committee chairman H'ng Mooi Lye said the changes followed feedback from operators and stakeholders after the by-laws took effect on 1 August. He said the new fees lower costs for small operators and better match the size of each business. The amendments also define private short-term accommodation more clearly, separating it from hotels by how a premises is actually used and run, so hotels cannot reclassify themselves to avoid licensing.

H'ng said operators must still meet licensing conditions and residents' interests remain protected, both outlets reported. Bernama quoted him saying the state is not relaxing its oversight, and that the January start gives the Penang Island City Council (MBPP) and Seberang Perai City Council (MBSP) time to refine their guidelines. EdgeProp, citing The Star, said the higher room limit will come with conditions set by the local councils.

The cuts follow complaints about the original rules. The Star reported on 7 September that operators faced up to RM2,850 a year per unit: a RM1,000 licence fee, a RM1,800 TIP fee and a RM50 application fee. The Malaysia Short-Term Rental Accommodation Association (MySTRA) said the charges could make legal operation unviable, and Penang Malaysia Homestay/Short-Stay Operators Association chairman Lydia Tan, who estimated 8,000 to 10,000 operators in Penang, has now welcomed the lower fees.