On 1 November, a Penang condo listed on Airbnb stops being a grey area and becomes an offence. The by-law has been in force since 1 August; what ends this month is the grace period.
Under the Private Homestay (Penang Local Authorities) By-Law 2026, every short-term rental operator needs a licence from the city council: MBPP on the island, MBSP on the mainland. Owners had until 1 November 2026 to apply before enforcement starts. When the by-law was announced, the penalty for operating without a licence was reported as a fine of up to RM2,000, up to a year in jail, or both.
What you should do in the next three weeks depends on one thing: what kind of property your unit is.
Key takeaways:
- The date: applications before 1 November 2026; enforcement after.
- Island condo or apartment: can't be licensed. Plan to move to long-term tenants or sell.
- Serviced apartment, SoHo or suite office: can be licensed, but only if your building votes yes by 75%.
- Mainland condo: permitted category, same 75% vote, then the MBSP licence.
- Landed house: considered only in designated zones, with a change-of-use approval.
Find your case
| Your unit | Can it be licensed? | What to do before 1 November |
|---|---|---|
| Condo or apartment on the island | No | Stop taking new short-stay bookings; switch to long-term letting or sell |
| Serviced apartment, SoHo or suite office on the island | Yes, if the building approves | Get the JMB/MC's written position, then apply to MBPP |
| Condo or apartment on the mainland | Yes, if the building approves | Get the JMB/MC's written position, then apply to MBSP |
| Detached, semi-D or terrace | Only in designated zones | Ask the council whether your street is in a zone and what the change-of-use approval needs |
| Affordable, low-cost or PPR unit | No, anywhere | Long-term letting only, if the scheme's own rules allow it |
This is the short version of the rules. The full list of permitted and excluded property types, the fees and the background are in my earlier post on Penang's new Airbnb law.
If your unit is an island condo
This is the hardest case, and there isn't a licence route. The by-law excludes stratified residential property on the island, and your building's vote doesn't change that.
You have three practical choices. Let it to a long-term tenant, which most Penang condos do well, especially near the hospitals, universities and the Bayan Lepas industrial zone. Furnish it as a mid-term rental: whether stays of a few months fall outside "short-term lodging" depends on how the council reads the by-law, so ask before you rely on it. Or sell, if the numbers only ever worked with nightly income.
If you take bookings after 1 November, check the dates already sitting in your calendar. Cancelling a December booking now is cheaper than a summons later.
If your unit is a serviced apartment or SoHo
You're in the permitted category, but the category is only the first of three gates. Your building's joint management body or management corporation must approve short-term letting by a special resolution with at least 75% of valid votes, and then the council must license your unit.
Ask management now whether that resolution has been passed. If it hasn't, it can't happen before 1 November, because a general meeting needs notice. In that case, apply for the licence anyway and keep a record that you applied within the grace period, but don't assume the application lets you keep operating.
Some serviced-apartment buildings have said no. City of Dreams in Tanjung Tokong is on commercial title and is a serviced apartment, but short-term letting isn't permitted there. Check your own building before you plan around a licence. My City of Dreams review explains how that works.
If your unit is on the mainland
MBSP's permitted list is wider: condos, apartments, townhouses and landed strata can all be licensed, provided the building's 75% vote is in place. The process is the same as above. Seberang Perai had far fewer complaints than the island, 24 against MBPP's 364 between 2020 and March 2026, so expect enforcement to start on the island.
If your unit is a landed house
Houses can be considered, but only in zones the councils designate and with approval to change the building's use. Several established neighbourhoods on the island have been excluded outright, including Jesselton Heights, Pearl Hill and Minden Heights. If you run a house as a homestay, call the council's licensing unit this month and ask whether your street qualifies, before you spend on the application.
What it costs to stay licensed
For a three-room unit, the council licence is RM1,000 a year, plus the RM1,800 annual TIP fee and the RM50 application: roughly RM2,850 in the first year. On top of that are the conditions on safety, cleanliness and guest capacity. For a unit earning steady nightly income that's a business cost. For one booked a few weekends a month, it may tip the sums towards long-term letting.
What this means if you're buying
If you're buying in Penang for short-stay income, buy the permitted category, and buy into a building that has already passed the 75% resolution. Don't rely on a sales brochure that calls a project "Airbnb-ready": for an unfinished building, the management body that votes doesn't exist yet.
Crown Penang in Tanjung Tokong and G'Vinton in George Town are two serviced-apartment launches on commercial title that fall in the permitted category. Neither can promise the vote. I cover both in the Crown Penang review and the G'Vinton review. If long-term letting is the plan, the rental yield calculator gives you honest numbers, and I can help you rent out a Penang property.
Zac’s Take
Zac Ong
Most of the owners I speak to are in the first row of the table: an island condo that was earning on Airbnb and can't be licensed. Don't spend the last three weeks hoping for an extension. Move to long-term tenants, or sell if the unit only made sense with nightly income. If you own a serviced apartment, the question isn't the title, it's your building's vote. Ask management today.
Tell me what you own and where, and I'll tell you which row you're in and what the unit is likely to fetch on a long-term let or a sale.
Sources: Private Homestay (Penang Local Authorities) By-Law 2026; announcement by state local government committee chairman Jason H'ng Mooi Lye, reported by The Star, Malay Mail, The Sun and Buletin Mutiara (21 August 2026); permitted property types from the MBPP and MBSP guidelines as reported by Penang Property Talk. Penalties as reported in the same coverage; check the by-law text or the council for the current position.
Disclaimer: This is general information, not legal advice. Enforcement practice and the councils' readings of the by-law may change. Confirm your own unit with MBPP or MBSP and your management body.