Licensing & tax guide

Short-term rental licensing & tax in Malaysia

There is no final national STRA rulebook yet. Kuala Lumpur operators are told to get a local-authority license before registering with MOTAC, and condo management bodies can ban short stays outright.

At a glance

Licensing steps

1. National Short-Term Residential Accommodation (STRA) guidelines prepared by KPKT/PLANMalaysia were still draft and not enforceable as of the latest coverage. They need Cabinet and National Council for Local Government approval.
2. MOTAC has said short-term rental premises must obtain a local-authority operating license before they can register as tourist accommodation premises. In Kuala Lumpur, the local authority is DBKL.
3. Strata buildings: in Innab Salil & Ors v Verve Suites Mont'Kiara Management Corporation, the Federal Court held that a management corporation can make house rules prohibiting short-term rentals.
4. Zoning: some councils may treat short-term letting as a material change of use that needs planning permission.

Tax notes

• Short-term rental income is taxable and must be declared to the Inland Revenue Board (LHDN). It may be treated as business income depending on scale and services.
• Tourism Tax is charged per night on foreign guests at registered accommodation premises.
• Service tax may apply to lodging businesses above thresholds.

Cities in Malaysia

Sources