MBPP’s guideline on short-term rental take immediate effect
Penang Island City Council (MBPP) has recently established a guideline that prohibits all forms of short-term rental (STR) accommodation in residential units on the island. The ban, effective immediately, aims to regulate the STR industry and maintain the integrity of residential neighborhoods.
Under the new regulation, private residential properties are strictly forbidden from engaging in STR business. Only commercial high-rises are permitted to offer STR services, subject to stringent regulations. However, even commercial properties must obtain approval from their respective joint management bodies (JMBs) or management corporations (MCs) before commencing STR operations.
To gain approval, STR providers in commercial categories must secure a 75% majority vote from other residents during the annual general meeting. Additionally, JMBs and MCs are required to collect an annual fee ranging from RM250 to RM500 per unit, with new registration fees of up to RM250.
To ensure compliance, the MBPP mandates that all approved units must be registered with the council. Furthermore, property owners must provide documentation from the Companies Commission of Malaysia.
The implementation of this ban reflects the local government’s commitment to strike a balance between supporting tourism and preserving the residential character of the island. By channeling STR activities to commercial high-rises, Penang aims to mitigate potential disturbances and maintain a harmonious living environment for its residents.
Annual Fee RM500 per unit x 100 units RM50k Yearly
First Time Registration Fee RM250 x 100 units RM25k 1 Time
Security Deposit RM3000 x 100 units RM300k
JMB/MC Will have additonal income and STR Host gonna dig in deeper pockets for this. Those with lesser units not an issue, but those with more than 20 units, well , need back up then.
Only question is, those under commercial properties that was previously ban, how ? All commercial properties as stated in the STR Guidelines show it is allowed. Once ban now it is open but based on the decision again to go through AGM for approval and so on ?
Each STR unit is only allowed to be rented for a maximum of 180 days a year and rental is also limited to three days a week.
Annual fee : RM500
Registration fee: RM250
Security deposit : RM3000
Total cost : RM3750 for start
Rental income: 3 days a week, say you manage to rent out 2 days a week = 52×2= 104 days rent per year, cost of each day = 3750/104= RM36
Deduct the utilities and cleaning charges, say RM50 , the cost each day rental is RM86.
Assuming the rental is RM300 per day (most of STR falls in this range), the rental income = (300-86)x104 = RM22256, divided by 12 months = RM1854 , this will be just almost same income as you get from normal monthly rental, in fact the actual would be even less if you hire services to look after your STR or lower rental price due to competition, remember that 75% majority vote are also coming from the same group of people who want to do STR business in this premises.
So is this STR business still profitable under new regulation? think about it.
@TY
Agree on your calculations.
Owners of the units, rental to STR Host from RM2000 to RM5000 as far as I know.
Some will do profit sharing and some will do based on rental.
Far as I can see on this long terms with many restrictions by Local Council, this is a very hard pill to swallow from both Owner and Tenants.
Plus also Register with Local Council for Lisences as well and Follow SOP for STR Guideline like Fire Excape and related to Bomba Specs as well.
Costly
Many condo even commercial had been ban from STR in Penang. I guess it’s loud enough to the government so they’re just doing what the majority wants. When STR is expensive enough, it will be better for traveler just to get a hotel.
@Decisions
Yes Indeed that many type of commercial been ban earlier on, due to many own stay owners are staying there. Through the STR Guidelines, hopefully every projects that currently does STR will go for the AGM/EGM to get it approve at 75%. STR units can cater for family members which can go up to 10 per head per unit, but for hotels it might be capped lower than that. At least can control the guest capacity and also the disturbance occured. With 180 cap night per year and 3 days per week this will gonna hit them hard. Do hope that council will review the cap nights from time to time after much proper regulations are done at the AGM/EGM.
Please la. Do this to landed properties too. Why the double standard? Landed properties has been facing these kind of issue for decades now. Even complain and sign a written memorandum also they do not bat an eye. What nonsense these MBPP, really getting lazy these past few years.
What options will travellers have if they want to stay 6-12 weeks in 1 place?
The new rules would mean having to stay in a hotel room – I would end up NOT coming back to Penang..
@Duncan CRESSWELL
That’s great! Penang need to reduce it’s traffic jam especially during big holiday
@Duncan CRESSWELL
I think non-business travel accommodation for a 6-12 week period is not that common, we should ignore that. Furthermore, hotels always have long stay option available for guests at a good discount.