Penang Short-Term Rental Licence: Grace Period Over, Fee Changes from January 2027
The two-month registration grace period under Penang's private short-term accommodation by-laws has ended. The state announced amendments from 1 January 2027: the annual licence fee per unit halves to RM500, the room limit rises from five to 10, and fees vary by room count. Before suggesting short-stay use to investors, agents must check licensing and building rules.
The amendments
Bernama reported on 23 October 2026 that state Local Government and Town and Country Planning Committee chairman H'ng Mooi Lye announced the room limit will rise from five to 10, with amendments effective 1 January 2027. The Star reported on 3 November that the annual licence fee per unit halves from RM1,000 to RM500 (for up to three rooms), and a room-based fee applies: RM400 for one room, RM600 for two, RM800 for three, RM1,000 for four and RM1,800 for five to 10. The two reports do not describe the fee structure identically; confirm actual amounts with MBPP or MBSP.
Grace period and enforcement
The Star reported that the by-laws were introduced in August with a two-month registration grace period, which has passed; non-compliant operators may face compounds, imprisonment or seizure of premises. Short-stay operators in landed homes under MBPP have a separate three-year grace period to meet planning requirements for changing residential to commercial use.
Agent insight: deduct compliance costs before projecting returns
This is agent analysis. When discussing short-stay with investors, include licence fees, building rules, insurance, cleaning, platform commissions and vacancy, then compare with long-term letting. For high-rise units, first check whether the management body allows short stays and watch for the state's upcoming guidelines for stratified buildings. Do not market 'high Airbnb returns'.
FAQ
Can I still operate without a licence now?
The grace period has passed and non-compliant operators may face enforcement. Apply to MBPP or MBSP and confirm requirements.
When do the new fees start?
The reports say the amendments take effect on 1 January 2027.
An agent’s follow-up message
Short-stay rentals in Penang now need a local authority licence, and fees change from 2027. If you are considering short-stay for your unit, I can check the building rules and licence requirements first and compare net returns from short and long-term letting. Shall I prepare that?