Homestay and rental terms in Malaysia
The words operators use every day, defined properly once. Tax and council fee terms are named, not quoted: their rates are set by LHDN and the local authorities, and they change. Every term has its own page with the full definition and related terms.
Operations
- Double booking
- A double booking happens when two guests confirm a booking for the same unit and the same dates. It almost always comes from calendars that are out of sync between channels, not from a typing mistake, and the cost is a cancellation, a refund, and a penalty from the platform whose booking was cancelled.
- Short-term rental
- A short-term rental is letting a house, room or bed for a few nights to a few weeks, priced per night. Guests usually book through Airbnb, Booking.com or a direct booking link, and the host handles check-in, cleaning between guests and payment for each booking, unlike a monthly rental, which comes with a tenancy agreement.
- Monthly rental
- A monthly rental is the letting of a house, room or bed for a month or longer at a fixed rent each month. It usually comes with a tenancy agreement, a security deposit and a utility deposit, with rent paid on the same date each month and a receipt issued for each payment.
- Homestay
- A homestay is a private house or room let to guests for short-term stays. In Malaysia the term has two meanings: the Malaysia Homestay Experience Programme under the Ministry of Tourism, Arts and Culture (MOTAC), registered with village communities, and everyday use for any private house let by the day.
- Shared room
- A shared room is a room let by the bed, where several tenants or guests who do not know each other live in the same room. Each bed has its own rent, deposit and term, while the kitchen, bathroom and living room are shared by everyone in the house.
Finance
- OTA commission
- OTA commission is the percentage of a booking's value that a platform takes as payment for bringing the guest. The rate differs by platform and listing type, and is charged again on every booking, including bookings from guests who have stayed before.
- Occupancy rate
- Occupancy rate is the percentage of nights sold out of the total nights available in a period. Ten nights sold out of thirty nights means an occupancy rate of 33 percent. It measures demand, not profit: a unit can be full at a price that is too low.
- ADR
- ADR is the average room revenue for each night sold, that is, total room revenue divided by the number of nights sold. It ignores empty nights, so a high ADR does not mean a healthy business if the unit rarely sells.
- RevPAR
- RevPAR is the revenue for each available night, whether sold or not. It is calculated by multiplying the occupancy rate by ADR, or by dividing total room revenue by total available nights. It is the only figure that captures price and demand at once.
- Assessment tax
- Assessment tax (cukai taksiran) is an annual property tax charged by a local authority such as MBPP or DBKL, based on the estimated annual value of the property. It is paid twice a year by the owner, not the tenant, unless the agreement says otherwise.
- Rental income tax
- Rental income is subject to income tax in Malaysia and must be declared to LHDN. Allowable expenses such as loan interest, assessment tax, insurance and repair costs can be deducted from gross rent to arrive at taxable income.
- Operating expenses
- Operating expenses are the costs of running a unit from month to month: cleaning, utilities, wifi, maintenance, platform fees and supplies. They differ from capital costs such as furniture or renovation, which are treated differently for tax purposes.
- Credit note
- A credit note is a record of money owed back to a tenant or guest: a deposit to be returned, an overpayment, or an adjustment after a bill has been issued. It keeps the adjustment on record, rather than deleting the original bill as if it never existed.
- Shared utility bill
- A shared utility bill is a house's electricity, water or internet bill split between several tenants. Common ways to split it are equally, by the number of nights each tenant stayed in the billing period, or by separate meter readings for each room's air conditioner, as agreed in the tenancy agreement.
- Utility deposit
- A utility deposit is money paid by the tenant on moving in to cover electricity, water or gas bills that may be outstanding when the tenancy ends. It is separate from the security deposit, and the amount is set in the tenancy agreement, usually based on an estimate of the unit's monthly bills.
- Rent receipt
- A rent receipt is written proof that the landlord has received a rent payment. A complete receipt states the receipt number, payment date, tenant's name, unit address, the month of rent paid, the amount in ringgit and the payment method, and becomes the landlord's record of rental income.
- Cleaning fee
- A cleaning fee is a one-off charge per booking that a host adds to clean the unit after guests leave. It is added on top of the nightly price and does not depend on the number of nights, so it makes up a larger share of the total for a one or two night booking than for a long one.
Legal
- Security deposit
- A security deposit is money held by the owner throughout the tenancy as security against damage or unpaid rent. It is not advance rent, and it remains the tenant's money until there is a recorded reason to deduct from it.
- Tenancy agreement
- A tenancy agreement is a written contract between owner and tenant that sets the term, rent, deposit, and the responsibilities of both parties. In Malaysia, lettings of three years or less are usually handled as a tenancy and must be stamped to be usable as evidence in court.
- Stamp duty on tenancy agreements
- Stamp duty is a tax paid to LHDN to stamp a tenancy agreement. Since 1 January 2025 it is calculated on the whole annual rent with no initial exemption, and the rate depends on the tenancy term. An unstamped agreement cannot be produced as evidence in court until the duty and its penalty are paid.
- Sublet
- A sublet is when a tenant lets all or part of the unit on to someone else. It requires the owner's written permission under most tenancy agreements in Malaysia, and subletting without permission is usually grounds for termination.
- Notice to vacate
- A notice to vacate is written notice that a tenancy will end on a set date, given either by the landlord to the tenant or the other way round. The notice period is set in the tenancy agreement, and a clear notice states the move-out date, key return and inspection of the unit before the deposit is returned.
- Tourism tax
- Tourism tax is a tax under the Tourism Tax Act 2017 charged on tourists for each room per night at qualifying accommodation premises. It is administered by the Royal Malaysian Customs Department, which sets the rate, exemptions, operator registration requirements and how the tax is collected and paid.
Channels
- iCal sync
- iCal sync is the way two systems share dates that are already booked through a single calendar file in .ics format. Airbnb, Booking.com and property management systems each publish an iCal link, and each side pulls the other's link on a schedule so the same unit is not booked twice.
- OTA
- An OTA is a third-party booking platform such as Airbnb, Booking.com or Agoda that brings guests to you and takes a commission on every booking. It is a marketing channel, not an operating system: it does not manage your monthly rent, cleaning work, or payment records.
- Direct booking
- A direct booking is a booking that comes straight from the guest to you, usually through your own booking page, without an intermediary taking a commission. You own the relationship with that guest, their data, and the payment and cancellation terms.
- Channel manager
- A channel manager is a system that keeps availability and prices in line across several booking channels. The simplest form uses iCal to share booked dates; deeper forms use an API to push prices and inventory as well.