GEORGE TOWN: A new by-law requiring private short-term rental operators (TIP) in Penang to obtain licences from local authorities has come into force, giving the councils clearer powers to regulate and take enforcement action against non-compliant operators.
State local government committee chairman Jason H'ng Mooi Lye said the Private Homestay (Penang Local Authorities) By-Law 2026 came into effect on Aug 1 following its approval by the state executive council on June 10.
He said the by-law was introduced following continued complaints over the operation of private lodging premises and was drawn up after taking into account current needs as well as feedback from relevant stakeholders.
"The by-law strengthens the regulatory and enforcement framework for TIP operations and ensures that they are carried out in a more orderly, safe and controlled manner," he said during a press conference at Komtar on Friday (Aug 21).
Under the new by-law, TIP operators must obtain a licence from the relevant local authority and comply with stipulated conditions covering operations, cleanliness, safety, prohibited activities and nuisances.
From 2020 until March 2026, Penang Island City Council (MBPP) received 364 complaints related to public nuisance and safety concerns arising from illegal private lodging (TIP) operations in its administrative area.
In Seberang Perai City Council (MBSP) area, 24 complaints were received during the same period.
H'ng said the by-law gave local authorities powers to inspect premises, investigate suspected offences, enter premises and close down premises where necessary.
He said several fees will be imposed on TIP operators, including an administrative fee of RM50 per licence application.
He said the annual licence fee is RM1,000 for premises with up to three rooms, with an additional RM200 per year for each extra room, subject to a maximum of two additional rooms.
He said annual TIP fee of RM1,800 will also be imposed for each unit, while a RM5 fee will be charged for each reminder notice issued by the local authority over outstanding fees.
H'ng stressed that TIP operations would not be allowed in premises owned by the Government or statutory bodies, healthcare or childcare centres, workers' hostels, private educational institutions, low-cost and low-medium-cost housing, controlled-price homes and People's Housing Projects.
He said areas permitted for TIP operations would be subject to internal controls and requirements set by MBPP and MBSP according to their respective jurisdictions.
"Generally, under the by-law, TIP operations may only be carried out in residential and commercial areas," he said.
However, H'ng said MBPP had introduced its own Planning Guidelines for Private Homestay to take into account the island's distinct urban characteristics, including heritage areas and other planning considerations.
The guidelines were approved by the state planning committee on Aug 3 and took effect on the same day.
He said the guidelines allowed TIP operations in general residential, general business and limited business land-use zones, in line with the Penang Local Draft of Island City Council Local Plan 2040.
"For TIP operations within the George Town World Heritage Site, the permitted zones will be subject to the George Town World Heritage Site Special Area Plan," he said.
H'ng said MBPP's guidelines prohibited TIP operations in all types of stratified residential properties and several existing residential areas, including Jesselton Heights, Pearl Hill, Lebuh Bukit Jambul, Taman Sungai Ara and Minden Heights.
The prohibited areas also include the area bounded by Jalan Utama, Jalan Gottlieb, Jalan Burma, Jalan Brother James, Jalan Cantonment and Jalan Nunn, as well as Jalan Tunku Abdul Rahman, Lebuhraya Rose, Rose Avenue, Jalan Park, Jalan Brown and Jalan DS Ramanthan, together with Jalan Bell.
For commercial properties under individual or strata titles, the types that may be considered for TIP operations include serviced apartments, small office home offices (SOHO), shops, shophouses and shop offices.
For individual-title landed residential properties, detached, semi-detached and terrace houses may also be considered.
"However, operators must submit an application for planning permission to change the use of the building to MBPP for consideration," said H'ng.
He added that all types of stratified residential properties were not permitted to operate as TIPs within the MBPP administrative area.
For the MBSP area, H'ng said TIP operations would be governed by the new by-law, which permits such operations in residential and commercial areas.
"MBSP will review its existing procedures and internal requirements for TIP applications and operations, including whether specific criteria or suitable areas need to be identified, taking into account current planning and land-use considerations," he said.
