Data collected from inter-connected smart home devices can enhance users’ quality of life and safety and optimise energy consumption in households; however, it poses serious privacy concerns due to potential data breaches and unauthorised data access. This study proposes a privacy-preserving solution for a smart home environment to overcome these challenges. The proposed architecture supports data collection, management and sharing for users, developers and manufacturers of IoT devices in smart homes. Also, it improves the transparency in user privacy control and ensures compliance with privacy regulations such as the General Data Protection Regulation (GDPR) for the European Union (EU) and the Personal Data Protection Act (PDPA) for Thailand. We implemented a prototype and tested it with both non-technical and technical users. The result from the questionnaires shows that all participants reported successfully completing all tasks and noted that the proposed prototype, with its graph visualisation and user-friendly design, makes understanding the policy’s scope easy. In the performance testing, over 90% of the participants were satisfied with the speed of setting up the privacy requirements through the designed tool. In the privacy-preserving test, 30% of participants admitted they typically do not read privacy agreements before accepting the use of any service. However, 60% of them felt reassured that the integrity and confidentiality of data are maintained. This is because the graphical tool clearly shows how their data is collected and shared, providing better transparency.