Penang: Penang has become the first state in Malaysia to implement the Private Homestay (Penang Local Authorities) By-Law 2026 (UUK TIP), which came into effect on August 1, to strengthen the regulation and enforcement of private homestay (TIP) operations. State Local Government and Town and Country Planning Committee chairman Jason H'ng Mooi Lye announced the new regulation, highlighting its significance in managing the burgeoning short-term accommodation sector.
According to BERNAMA News Agency, the proposal to gazette the by-law was approved by the State Executive Council on June 10, with a two-month grace period granted for operators to secure necessary licenses. TIP refers to short-term accommodations available for up to six consecutive months without a tenancy relationship between owner and tenant, managed either independently or through platforms for a fee. This initiative aims to cater to the growing demand for alternative lodging options in line with the tourism sector's expansion.
Chairman H'ng emphasized that while TIP operations offer affordable accommodation solutions, they must be conducted responsibly to avoid disturbances, such as noise pollution and traffic congestion, which could affect local residents. Between 2020 and March 2026, the Penang Island City Council (MBPP) received 364 complaints concerning nuisances and safety issues linked to unauthorized TIP operations, while the Seberang Perai City Council (MBSP) received 24 similar complaints.
Under the new by-law, TIP operators are required to obtain a license from local authorities, adhering to regulations regarding cleanliness, safety, and nuisance prevention. Local authorities are also empowered to inspect, investigate, and shut down premises found violating the by-law. An administrative fee of RM50 will be charged per application, with an annual license fee of RM1,000 for properties with up to three rooms, plus RM200 for each additional room.
There will also be an annual TIP fee of RM1,800 per unit. Non-compliance with the by-laws could result in fines up to RM2,000, imprisonment for up to one year, or both. TIP operations are prohibited in government-owned properties, healthcare or childcare centers, workers' hostels, private educational institutions, and specific housing types, including low-cost and low-medium-cost housing.
H'ng further explained that designated TIP zones would be subject to MBPP and MBSP controls, with operations on the island aligning with the Penang Local Draft of Island City Council Local Plan 2040 and the George Town World Heritage Site Special Area Plan.