Privacy concerns arise in a wide range of context. One of such context is in smart devices used within smart environment. Adaptors of such developments are generating an ever-increasing amount of data; this is often done without their consent or been fully aware of the implications of sharing and using such devices. This paper identifies the implications and challenges of privacy to smart devices in smart homes. The paper begins with a background and motivation. Subsequently, current privacy and security issues are discussed and analysed. Framework for privacy and security in smart homes is proposed and discussed in the subsequent section, while also presenting early simulation results.