Airbnb & Short-Term Rental Rules in Malaysia and Johor (2026 Update)

Short-term rental rules in Malaysia have been “coming soon” for several years, and 2026 has brought real movement: a dated parliamentary update in October, Penang’s new homestay by-law in August, and the first official count of holiday homes from the Department of Statistics. This guide sets out the Airbnb and short-term rental rules in Malaysia and Johor as they stand in November 2026, what investors should check before buying a unit for short-stay, and how this applies to serviced apartments near the JB CIQ and RTS. If you want the income side of the question (nightly rates, occupancy and a worked comparison with long-term rental), read our separate guide to Airbnb vs long-term rental near the JB RTS; this page focuses on the rules.

Is Airbnb legal in Malaysia in 2026?

Short-term rental is not banned nationally in Malaysia, but it is not a free-for-all either: it is legal where the building’s by-laws and the local authority allow it, and both can restrict it. No dedicated federal Airbnb law exists yet; instead several layers of rules apply at the same time.

National STRA guidelines: the latest status (November 2026)

The national short-term rental accommodation (STRA) guidelines are in their final review stage. On 26 October 2026, Deputy Housing and Local Government Minister Datuk Aiman Athirah Sabu told the Dewan Rakyat that KPKT, through PLANMalaysia, is finalising the guidelines with MOTAC, state governments and local authorities, and is waiting for MOTAC’s input before resubmitting them to Cabinet.

The key points from that update, reported by The Star and The Edge:

• Next steps: Cabinet, then the National Council for Local Government (chaired by the Prime Minister and attended by state leaders), then adoption by each state and local authority. No date was given.
• Registration and licensing: the aim is that only premises registered and compliant with local authority licensing may operate legally.
• Platforms: the government wants booking platforms to check licence status before listing a property and to delist non-compliant ones.
• Strata properties: stay subject to their JMB or MC by-laws under the Strata Management Act 2013.
• Night cap: a proposed 180-night yearly limit is being assessed, weighing owners’ income and tourism needs against safety and residents’ well-being. No cap has been decided.

The timeline has moved before: in September 2025 MOTAC said it was aiming to implement the guidelines by the end of 2025. Investors should therefore plan around today’s rules and treat the national guidelines as a framework that is likely to formalise licensing rather than a ban.

Johor and JB: what is the local position?

Johor has not yet issued its own short-term rental by-law, so in JB the deciding factors today are the building’s by-laws and any local council requirements, with the national guidelines expected to set the state’s direction once adopted. In May 2023 the state exco for housing and local government said Johor had no immediate plans to regulate short-term stays, describing many of them as a tourism product, while saying the state would study whether regulation was needed.

Demand has grown since. The Department of Statistics Malaysia’s first holiday homes bulletin, released in July 2026, counted 71,101 operating holiday homes in Malaysia in 2025, with 7,274 in Johor and 3,186 in the Johor Bahru district, the third-highest district in the country. Johor hoteliers called in August 2025 for the national guidelines to be enforced so that all operators compete on the same licensing, tax and safety terms.

Penang shows what state rules can look like

Penang is the first state to enforce a dedicated law. Its Private Homestay (Penang Local Authorities) By-Law 2026 took effect on 1 August 2026 and requires a council licence, safety and cleanliness standards, and annual fees. On Penang Island, the city council’s planning guidelines exclude stratified residential properties, while commercial properties such as serviced apartments and SOHO units may be considered, subject to planning permission. Other states, including Johor, may take their own approach, but the Penang model is a useful reference for the direction of travel.

Strata by-laws and court cases: can a condo ban Airbnb?

Yes. Malaysia’s Federal Court has confirmed that a management corporation can pass by-laws that prohibit short-term rentals in its building, even where the land title allows commercial use. Before buying for short-stay, the by-laws of the specific building matter more than any national headline.

In Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation (Federal Court, October 2020), the MC of a service suite development in Kuala Lumpur, on land with a commercial-use condition, passed a house rule banning short-term rental. Owners argued this breached section 70(5) of the Strata Management Act 2013, which stops by-laws from restricting “dealings” such as tenancies. The court disagreed: it treated platform stays as licences rather than tenancies, so the by-law was valid, and it held that a commercial title does not stop an MC from regulating use through by-laws.

What this means in practice:

• By-laws can change: owners in general meeting can pass, amend or remove short-stay rules, so a building’s policy reflects its owners.
• Before the MC exists: in a new project, the developer manages the building at first and a JMB or MC is formed later; ask what the initial house rules provide.
• Enforcement: MCs can fine owners for breaches, and disputes go to the Strata Management Tribunal.

Tourism tax, registration and licensing

Foreign guests staying in accommodation premises in Malaysia pay a tourism tax of RM10 per room per night; Malaysian citizens and permanent residents are exempt. The tax is administered by the Royal Malaysian Customs Department under the Tourism Tax Act 2017 through the MyTTx system, and booking platforms registered as digital platform service providers charge and remit it for bookings made through them.

• Check the platform: if your bookings go through a major platform, confirm whether it collects tourism tax for your listing, and keep records.
• Direct bookings: if you take bookings directly, check with Customs whether you need to register and file returns yourself.
• Business licence: in August 2025 the Tourism Minister said short-term rental operators will need a business licence from their local authority before registering as tourist accommodation premises. Check the current position with the Johor Bahru city council before starting.
• Service tax: larger accommodation operators may also have service tax obligations; take tax advice if your revenue is significant.

Income tax on short-term rental income

Rental income from Malaysian property is taxable, whether you live in Malaysia or abroad. Passive letting is usually taxed as rental income under section 4(d) of the Income Tax Act 1967, but short-stay letting with hotel-style services, staff or several units can be treated as business income under section 4(a).

• Residents: net rental income is added to total income and taxed at progressive rates.
• Non-residents: rental income is generally taxed at a flat 30%, without personal reliefs.
• Deductible expenses for passive letting typically include assessment tax, quit rent, loan interest on the property, fire insurance and ordinary repairs. Initial costs such as first-letting advertising and capital renovation are generally not deductible.

Keep every platform statement, cleaning invoice and utility bill. If you use an operator, ask for a monthly statement that separates gross bookings, fees and net payouts; it makes tax filing much easier.

Five common myths about short-term rental rules

Much of what is said about short-term rental rules is out of date or oversimplified. Here are the claims heard most often, and what the rules actually say.

• “A commercial title means Airbnb is always allowed”: not necessarily. Serviced apartments on commercial land suit hospitality use, but the Federal Court has confirmed that an MC can still regulate or ban short-stay through by-laws.
• “The national guidelines will ban short-term rental”: what has been made public points to registration and licensing so that compliant operators can run legally, not a blanket ban, and no night cap has been decided.
• “If a platform lists it, it is legal”: a listing is not a local authority approval, and the government wants platforms to check licences before listing.
• “Small short-stay income does not need to be declared”: rental income from Malaysian property should be declared, including by owners who live abroad.
• “By-laws never change”: owners in general meeting can pass, amend or remove them, so ask management about past meeting decisions to understand the building’s direction.

What to check before buying a unit for short-term rental

The best protection is to check the rules for the specific building before you buy, and to buy a unit that works for both short-stay and long-term tenants. Use this checklist:

1. By-laws and house rules: ask the developer or management for the current rules on short-stay letting, minimum stay periods and guest registration.
2. Title and land use: note whether the project is residential or commercial (serviced apartment). A commercial title can support hospitality use, but by-laws still apply.
3. Operator arrangements: some projects plan an appointed hospitality operator for part of the building, which can give owners a structured, compliant route to short-stay income.
4. Insurance: standard home policies may exclude paying guests; ask for cover that includes short-term letting and public liability. The proposed Tourism Industry Act changes also mention insurance protection.
5. Local licensing: check the Johor Bahru city council’s current requirements and watch for the national guidelines.
6. Exit flexibility: choose a layout that rents well long-term too, so your plan still works if rules tighten. Our guide to furnishing a rental unit in JB covers fit-outs for both models.

How the rules apply to serviced apartments near the CIQ

Serviced apartments near the JB CIQ and RTS are well placed for short-stay demand, and the projects best positioned are those with clear building rules and, ideally, a professional operator. Many projects in the city centre are serviced apartments on commercial land; see our explainer on whether a serviced apartment is residential or commercial for what that means for loans and fees.

Causewayz Square is a freehold serviced apartment development on commercial land, about 600 m from JB CIQ and about 800 m from the Bukit Chagar RTS station, with a target completion around 2030. Its Axis tower has a planned hospitality operator, Mana-Mana, which is associated with EXSIM. That structure suits owners who want short-stay income without running it themselves, while dual-key layouts let owners mix strategies where building rules allow. As with any project, confirm the final house rules and operator terms before you commit; WhatsApp us for the latest brochure, floor plans and SPA price list.

The RTS Link, targeted to start passenger service in February 2027, adds a new flow of visitors who can cross from Woodlands North in about five minutes by rail. Tenants also benefit, and our tenant guide to renting near the JB RTS and CIQ covers the long-term rental side. If you would rather not manage guests yourself, our guide to property management in JB compares the options.

Sources

• The Star: Guidelines to regulate short-term rental accommodation being finalised (26 Oct 2026)
• The Edge Malaysia: STRA guidelines update (26 Oct 2026)
• The Star: Short-term rental operators need to obtain licences soon (Aug 2025)
• The Vibes: Penang is first state to enforce private homestay law (Aug 2026)
• Skrine: Federal Court, management body can stop short-term rentals (Oct 2020)
• RinggitPlus: DOSM holiday homes statistics 2025 (Jul 2026)
• The Star: Johor exco on short-term rentals (May 2023)
• PropertyGuru: Rental income tax in Malaysia (2026)

This guide is general information, not financial advice.