Short Term Rental Malaysia: Is Airbnb Legal? By-Laws, Local Rules and Tax

Is Airbnb legal in Malaysia? Start with whether a federal law exists

The direct answer: as at September 2026 there is no federal short-term rental (STRA) law in force in Malaysia. In a written parliamentary reply reported on 7 August 2025, the Minister of Tourism, Arts and Culture, Datuk Seri Tiong King Sing, said the Planning Guidelines for Short-Term Rental Accommodation were still to be presented to Cabinet, after which they would go to the National Council for Local Government and then to state governments and local councils for adoption. Amendments to the Tourism Industry Act 1992 were, at that point, targeted for Parliament by year-end 2025 or early 2026, after a preliminary review and 54 engagement sessions with close to 1,000 participants. The minister also set out the constitutional position: “licensing and enforcement of accommodation premises come under the respective state’s local authority.”

As at 29 September 2026 we could find no source confirming that the guidelines have been adopted nationally, or that the Tourism Industry Act amendments were tabled, passed or gazetted. iProperty’s 2026 guide likewise states the guidelines “are not yet finalised or enforceable” and that operators “remain subject to varying local rules rather than a single national standard.” So anyone telling you that STRA registration is now mandatory, or quoting the draft as if it were law, is wrong — and this page will not present a proposal as law.

What does decide it: three independent tests

1. Federal: is there an STRA law in force? No. The draft is KPKT’s, developed through PLANMalaysia, with tourism oversight at MOTAC and licensing and enforcement with local authorities.
2. Strata: do your building’s additional by-laws or house rules allow it — and can a management body lawfully prohibit it at all? This is the contested one.
3. Local authority: does the council license, restrict or ban it, and is the land-use condition on your title consistent?
4. On top of all three sit tax and compliance: tourism tax, service tax (SST) and income tax.

How strata by-laws and house rules are made and enforced

Whether a restriction has teeth depends on which of three tiers it sits in.

1. Prescribed by-laws: the Third Schedule to the Strata Management (Maintenance and Management) Regulations 2015, P.U.(A) 107/2015. They apply to every scheme automatically, without any vote.
2. Additional by-laws: made by the management body itself, passed by special resolution and filed with the Commissioner of Buildings within 30 days. The power sits in s.32 for a JMB, s.70 for a management corporation or sub-MC and s.71 for limited common property. The maximum fine for a breach is RM200 per offence (s.70(2)(i)).
3. House rules: the building’s own rules. That is the tier Innab Salil was about.

On enforcement, a management body can fine up to RM200 per offence and pursue the sum through the Tribunal or the courts. What Wawasan Raya adds is the risk running the other way: get the process wrong and the restriction itself is unenforceable, fine included. So the questions an owner should ask are not “what does management say” but: which general meeting passed this, where are the minutes, was it filed with the COB within 30 days, and has any later resolution superseded it? The meeting machinery behind all of that is in when strata management fails: elections, voting and the Tribunal.

Tax on short-term rental: tourism tax, SST and income tax

This layer does not depend on your building’s by-laws or on whether your council licenses anything. Tax is national.

The combination people miss: a host with one or two rooms is not required to register for tourism tax and collects nothing on a direct booking – but the operator’s exemption does not travel to the platform. A registered platform (DPSP) charges a foreign guest RM10 a night on every booking it handles, whether or not you are registered or exempt. The part to get right is who takes the money: if the platform collects the guest’s payment, the platform accounts for the tax and remits it; if the booking is pay-at-property and the money reaches you, RMCD’s Public Ruling 1/2025 puts the accounting on the registered operator who received it. So the question is not only “am I registered” but “who collected the guest’s payment”.

Does SST apply? Group A accommodation, not the Group K rental exclusion

This is the easiest thing on the page to get wrong, and the mistake is to read the answer out of the wrong taxable group. A long residential tenancy sits in Group K, rental or leasing services, of the First Schedule: taxable from 1 July 2025 at 8%, cut to 6% from 1 January 2026, and registrable only once rental turnover passes RM1 million in 12 months (it was gazetted at RM500,000 and raised by the Ministry of Finance revision announced on 28 June 2025). What matters most is that Customs’ own rental guide excludes housing accommodation, and defines it broadly: terrace houses, semi-detached houses, flats, apartments, serviced apartments, condominiums, serviced suites, affordable housing, and SOHO units in residential use. So an ordinary residential landlord on an annual tenancy charges no service tax. Commercial space — a SOFO used as an office, a shop lot — can be caught.

Running the unit as short-stay accommodation is a different group. Accommodation is Group A, the provision of accommodation premises, and it has been taxable since SST began on 1 September 2018 — seven years before the 2025 expansion. The list in Customs’ accommodation guide is “hotels; inns; lodging house; service apartment; homestay; and any other similar establishment“. The Group K exclusion is an exclusion from Group K only. It takes long-term residential letting out of the rental and leasing group; it says nothing at all about Group A, and it does not exempt a residential unit that is being run as short-stay accommodation. A landlord who reads “residential lettings are excluded” and concludes that Airbnb income can never attract service tax has read the wrong group. The Group A rate is 8%: accommodation went from 6% to 8% on 1 March 2024 with most taxable services, and the cut back to 6% on 1 January 2026 applied to rental and leasing services only, so accommodation is still 8%.

The taxable person is the host, not the platform. Customs’ accommodation guide answers this directly for booking platforms: where a hotel takes bookings through a platform such as Agoda, the operator accounts for the service tax, because the accommodation is provided by the operator — whoever invoices the guest. Airbnb’s own Malaysia tax guide says the same from the other side: it is the host’s responsibility to consider, charge, report and remit service tax on the accommodation charge, and Airbnb does not collect Malaysian service tax on your behalf. What actually keeps a one- or two-unit host out of it is the RM500,000 registration threshold over 12 months — not a residential exemption. On the worked example in Airbnb’s guide, RM300 of accommodation is tax-inclusive, so the service tax is (300 ÷ 108) × 8 = RM22.22 and the net is RM277.78. Stated precisely: the same unit sits outside SST as an annual tenancy and inside Group A as a short-let business — the threshold is what spares you registration, not an exclusion.

Income tax: a short-let looks more like a business than a tenancy

LHDN’s Public Ruling 12/2018, Income from Letting of Real Property, turns on whether maintenance or support services are provided “comprehensively and actively”, by the owner or by a firm it hires. If they are, the letting is a s.4(a) business source: capital allowances are available, losses are current-year business losses eligible for carry-forward, and revenue expenses are deductible under s.33(1). A furnished, cleaned, platform-managed short-let with check-in and guest support looks much more like that than a plain annual tenancy does. But we found no LHDN ruling or public decision applying PR 12/2018 specifically to Airbnb hosting, so this page will not classify your income for you — take it to a tax agent. Airbnb’s own Malaysia tax guide lists deductibles as assessment tax, quit rent (cukai tanah), loan interest, fire insurance premiums, rent collection and renewal costs, repairs and property maintenance, while setup costs such as advertising, legal fees, stamp duty and agent commission are not deductible. Non-resident owners remain on the flat 30%. For ordinary tenancies see rental income tax and tenancy agreements, and for non-residents non-resident rental income tax.

A checklist before you list the unit

• Get the full text of your building’s prescribed by-laws, additional by-laws and house rules, plus the copy filed with the COB and its filing date.
• Read the minutes of the last two AGMs or EGMs: is there a resolution permitting or prohibiting short-letting, and which came later? A later resolution can supersede an earlier one.
• Check the land-use condition on the title: residential, or a commercial building for service apartments?
• Ask the local authority in writing. In Penang that means an MBPP or MBSP licence; elsewhere, ask whether any licence or restriction exists rather than relying on what neighbours say.
• Ask your bank whether the loan terms permit commercial short-term letting.
• Ask your insurer about the declared use on your fire and houseowner policies and about liability cover while guests are staying.
• Tax: confirm the platform will collect the RM10 a night tourism tax from foreign guests; work out whether taxable services will reach RM500,000 in 12 months (SST at 8%); and get a tax agent’s view on s.4(a) versus s.4(d).
• Build guest registration, access card limits, noise and refuse rules into your hosting process, and keep check-in records and receipts.
• Get a lawyer’s written opinion on your building’s by-laws. This page can only tell you the law is unsettled; it cannot tell you how your own house rules read.