Renting Out Your Condo on Airbnb in Malaysia: Is It Legal and What Does Your Strata Say?

Renting your condo on Airbnb or similar platforms is not automatically illegal in Malaysia, but it is also not a free-for-all. Whether you can legally operate a short-stay unit depends on three overlapping layers: national court rulings, your strata building’s bylaws, and your local council’s registration requirements.

This guide cuts through the noise so you understand exactly where you stand before you list.

The national legal picture in 2025 and 2026

Malaysia does not yet have a single national law that specifically governs short-term rental accommodation (STRA). The closest thing is the Strata Management Act 2013 (Act 757), administered by the Ministry of Housing and Local Government (KPKT) through the Commissioner of Buildings (COB), which governs how condo management bodies operate.

In 2025 KPKT circulated a draft STRA framework for public consultation. As of mid-2026 those guidelines have not been gazetted, meaning they are not yet legally binding. The Ministry has indicated that amendments to the Tourism Industry Act 1992 may be tabled in Parliament, covering host licensing, platform registration, insurance, and the creation of a dedicated tourism complaints tribunal. Until that legislation passes, the regulatory patchwork remains in place.

The practical result: what is permitted in your building often differs from what is permitted in the next block, and what Kuala Lumpur allows differs from what Johor Bahru or Penang Island requires.

What the courts have decided

Two landmark cases define the current boundaries.

Federal Court: Innab Salil v Verve Suites Mont’ Kiara (decided before 2025)

The Federal Court confirmed that a Management Corporation (MC) or Joint Management Body (JMB) can enact house rules that prohibit short-term rentals. Critically, the court held that a short-stay arrangement is a licence (a permission to occupy), not a lease (a legal interest in land). This distinction matters because Section 70(5) of the Strata Management Act 2013 protects the right to “deal” with your parcel, such as selling or leasing it. Because an Airbnb booking is a licence rather than a lease, a blanket Airbnb ban in house rules does not violate that protection.

What this means for owners: if your condo’s house rules prohibit short-term rentals, that prohibition is likely enforceable even if you personally object.

Court of Appeal: Wawasan Raya v MARC Service Residence MC [2025] 4 MLRA 1

This 2025 ruling added an important counterweight. The Court of Appeal found that:

Short-term rental is not inherently unlawful under the Strata Management Act 2013 or the Strata Management Regulations 2015. Neither document contains an explicit prohibition.
A management corporation’s statutory powers under Section 59 of the Act do not extend to regulating the use or occupation of individual parcels.
Any MC restriction on short-term rentals must be introduced through the proper statutory mechanism: a special resolution passed at a general meeting of parcel owners.

What this means for owners: if your building has never passed a properly worded special resolution banning short-stay rentals, a blanket prohibition imposed by the MC committee alone may not hold up in a tribunal or court.

The three layers you must check

Layer 1: Your building’s bylaws and house rules

This is the most immediate constraint. Before listing your unit, locate and read:

The Deed of Mutual Covenants (DMC) signed when you purchased. Some developers inserted residential-use clauses that restrict commercial activity, including short-stay hosting.
The house rules issued by the JMB or MC. Check whether these were passed by special resolution at an AGM or EGM, or merely adopted by the committee.
The building’s AGM minutes for any recent resolutions on short-term rentals.

Scenario	Can you list on Airbnb?
No house rule or DMC restriction exists	Yes, subject to local council rules
House rule banning STR passed by special resolution	Almost certainly no; prohibition likely enforceable
Committee-imposed ban without special resolution	Contested; seek legal advice before proceeding
DMC has residential-only clause from developer	Very risky; may breach your sale and purchase terms

Layer 2: Your local council (PBT) requirements

Malaysia’s 151 local authorities set their own rules. DBKL (Kuala Lumpur) launched a short-term rental registration programme and has stated that failure to register is an offence subject to enforcement action. Other councils in the Klang Valley, Penang, and Johor have their own requirements or are in the process of developing them.

Steps that most councils expect, where applicable:

Obtain or confirm a valid Occupation Certificate (OC) or Certificate of Completion and Compliance (CCC) for the unit.
Register the unit as a short-stay premises with the local council (PBT).
Comply with any conditions attached to that registration, such as limits on the number of guests, noise, or parking.
Ensure the building itself has the correct planning permission category. Units in developments zoned purely for residential use face higher scrutiny than serviced residence or SOHO units.

Contact your local council directly. Requirements are changing as councils develop enforcement capacity alongside KPKT’s national framework.

Layer 3: Tax obligations

Short-stay income is taxable. Two separate obligations apply.

Income tax (Lembaga Hasil Dalam Negeri, LHDN): Rental income from Airbnb is treated as business income by LHDN because of the service element involved (cleaning, key handover, guest support). This is different from a long-term tenancy, which is assessed as non-business income. You must declare it under your personal or company tax return. Allowable deductions include management fees paid to the platform, cleaning costs, furnishing depreciation, and interest on your home loan attributable to the rental period. The LHDN has previously confirmed that income from short-stay platforms falls within taxable rental and service income.

Tourism Tax (Cukai Pelancongan): Since 2019, accommodation providers who host foreign guests are required to collect and remit a Tourism Tax of RM10 per room per night for non-citizens, administered by the Royal Malaysian Customs Department (RMCD). Airbnb collects this automatically for stays involving foreign guests in many cases, but hosts should verify collection is occurring correctly.

What your strata management body can actually do

If you violate an enforceable house rule against short-term rentals, the JMB or MC has several tools.

Written notice and fine: the MC or JMB can issue a notice of breach. Under the Strata Management Act 2013, management bodies may impose fines for breach of house rules, which can accumulate if the breach continues.
Restriction on access cards or facilities: some buildings have suspended lift access cards or prohibited guests from using amenities pending resolution.
Strata Management Tribunal (SMT): either party (owner or management body) can file a claim at the SMT, which is a low-cost, lawyer-optional tribunal. The SMT can order an owner to stop the activity or award compensation to the management body or affected neighbours.
High Court: for injunctions or larger damages claims, either side can escalate beyond the SMT.

The Commissioner of Buildings (COB), operating under KPKT, can also investigate complaints and compel compliance with the Strata Management Act 2013 and its regulations.

Practical checklist before you list

Use this before you publish your condo on any short-stay platform.

Read the DMC from your property purchase for any residential-use restriction
Check the latest house rules from your JMB or MC for any STR prohibition, and verify whether it was passed by special resolution
Contact your local council (PBT) to confirm registration requirements and obtain any licence needed
Inform your building manager of your intention to host and keep a written record of their response
Register with LHDN if not already done, and track all short-stay income and allowable expenses
Confirm that Airbnb’s Tourism Tax collection is active for foreign guests, or register separately with RMCD
Review your home insurance policy: standard fire and contents policies typically exclude commercial hosting liability

Key takeaways

Short-term rental in a Malaysian condo is not automatically illegal at the national level, but it is tightly regulated by strata law and local council rules.
The 2025 Court of Appeal ruling confirmed STR is not inherently prohibited by the Strata Management Act 2013, but also confirmed that a valid special resolution can ban it in your building.
Your building’s house rules and DMC are the first and most immediate constraint to check.
KPKT’s national STRA framework is in draft as of mid-2026 and not yet in force, so local council requirements remain the operative external rule.
Short-stay income is treated as business income by LHDN and is subject to Tourism Tax for foreign guests.
Breaches of enforceable house rules can result in fines, Strata Management Tribunal claims, and loss of facility access.

Frequently asked questions

Can my MC ban Airbnb even if I own the unit? Yes, if the ban was passed through a valid special resolution at a general meeting of owners. The Federal Court confirmed in the Innab Salil case that such rules are enforceable because an Airbnb booking is a licence, not a lease, so it falls outside the statutory protection for your right to deal with your parcel.

What if the committee just issued a circular banning Airbnb without holding an AGM vote? A committee-imposed prohibition without a special resolution is on weaker legal footing following the 2025 Court of Appeal ruling in Wawasan Raya. However, acting on that ambiguity is risky. Consult a property lawyer before listing. The cost of a tribunal dispute typically exceeds whatever you would earn from a few months of short-stay income.

Do I need to register with DBKL if my condo is in KL? DBKL has stated that registration is required and that failure to register constitutes an offence. The registration process involves working through DBKL’s licensing framework. Contact DBKL’s One Stop Centre or check the DBKL official portal for current forms and requirements, as these are evolving.

Is income from Airbnb taxed differently from long-term rental income? Yes. LHDN treats short-stay platform income as business income because of the active service component involved. Long-term tenancies (12 months or more, with minimal services) are generally treated as non-business rental income. Business income is subject to the same progressive tax rates but has different allowable deduction rules. Consult an accountant if you are unsure how to classify your income.

What happens if a neighbour complains about my Airbnb guests? Your neighbour can lodge a complaint with the JMB or MC, which may issue you a notice of breach or impose a fine. They can also file a claim at the Strata Management Tribunal. In persistent cases, the MC may seek a court injunction. Address any complaints quickly and document all communication.

Educational content only, not financial advice. Verify current figures with official sources.