Rate peg for the 2024-25 financial year

IPART has set the rate peg for the 2024-25 financial year using our new rate peg methodology. The core rate peg for the 2024-25 financial year for each council (i.e. before applying the population factor) ranges from 4.5% to 5.5%.

IPART’s rate peg takes into account the Base Cost Change (BCC) by council group (metropolitan, regional and rural), in addition to a population factor based on each council’s population growth and an Emergency Services Levy (ESL) factor to reflect annual changes in each council’s ESL contributions that differ from the changes to the council’s BCC.

The rate pegs for the 2024-25 financial year also include a catch-up adjustment for past changes in the superannuation guarantee rate and a council-specific ESL adjustment for some councils. The purpose of the council-specific ESL adjustment is to reflect the increase in the ESL in the years when increases were not captured by the rate peg because they were subsidised by the NSW Government.

The population factor in the rate peg maintains the amount of rates collected per person in areas that have a growing population. The final rate peg for the 2024-25 financial year for each council (i.e. after applying the population factor) ranges from 4.5% to 8.2%.

For more information on the rate peg for the 2024-25 financial year, please see our Information Paper, which includes the rate peg for each council, and our Media Release.

Our Rate peg model for the 2024-25 financial year and our ESL factor and ESL adjustment factor calculator show how the rate pegs, ESL factors and ESL adjustment factors are calculated.

We have used our new rate peg methodology

We have used our new rate peg methodology to set the rate peg for the 2024-25 financial year.

We developed our new rate peg methodology following extensive consultation with stakeholders. The new methodology will produce rate pegs that more accurately reflect the increase in costs for each council. It will also better account for the diversity among NSW councils and help ensure ratepayers contribute only to costs relevant to their local government area.

For more information on our new rate peg methodology, please see Review of the rate peg methodology.

What is the rate peg?

The rate peg is the maximum percentage amount by which a council may increase its general income for the year. For most councils, general income consists entirely of rates income. The rate peg does not apply to stormwater, waste collection, water and wastewater charges.

Councils can increase general income by up to the rate peg, less than the rate peg, or not at all. If a council does not apply the full rate peg increase, it will be able to catch up on the shortfall in general income over any one or more of the next 10 years. Councils have discretion to determine how to allocate the rate peg increase between different ratepayer categories.

How the rate peg is set

Under our new rate peg methodology, the rate peg is typically based on the BCC by council group, a productivity factor, a population factor for each council and an ESL factor for each council. However, IPART has discretion over the rate peg percentage and can adjust the rate peg above or below the percentage produced by the BCC, productivity factor, population factor and ESL factor, if we consider this appropriate.

The rate pegs for the 2024-25 financial year include a catch-up adjustment for past changes in the superannuation guarantee rate and a council-specific ESL adjustment for some councils. The purpose of the council-specific ESL adjustment is to reflect the increase in the ESL in the years when increases were not captured by the rate peg because they were subsidised by the NSW Government.

Our Rate peg model for the 2024-25 financial year and our ESL factor and ESL adjustment factor calculator show how the rate pegs, ESL factors and ESL adjustment factors are calculated.

How the rate peg affects individual rates

The rate peg sets the maximum increase in each council's general income for the financial year. The rate peg applies to general income in total, and not to individual ratepayers’ rates. As long as its general income remains within the set maximum increase, councils may increase categories of rates by higher or lower than the rate peg.

Individual rates are also affected by other factors, such as land valuations, which can affect percentage changes to rates alongside the rate pegging process. The rate peg affects some other council fees in addition to household and business rates. More information is available under our Local Government Frequently Asked Questions.

Under the Local Government Act, councils are able to seek additional increases in general income above the annual rate peg, by applying to IPART for a 'special rate variation'.

Assumed rate peg for 2025-26 and future years

Special variation applications

Councils applying for a special variation in 2024-25 should use the 2024‑25 rate peg set by IPART in their applications. For further information about the assumed rate peg, please refer to our special variation webpage here.

Long term financial plan reviews and updates

We encourage councils that are updating or reviewing their Long Term Financial Plans to refer to the Office of Local Government’s Integrated Planning & Reporting Handbook for Local Councils in NSW, and to seek advice from the Office of Local Government where necessary to determine their revenue forecasts for rates and charges for future years.

Minimum rates

Under the Local Government Act 1993, a council may specify a minimum amount of a rate to be levied on each parcel of land. If a council resolves to adopt a minimum amount of a rate, the minimum amount must not exceed the relevant statutory limits, unless the council applies to increase its minimum rate by making a minimum rate increase application to us (more information here).

The statutory limits for minimum rates for the 2023-24 financial year are:

  • $590 for the minimum amount of an ordinary rate
  • $2 for the minimum amount of a special rate.

IPART has recommended to the Minster for Local Government that the statutory limit for the minimum amount of ordinary rates for 2024-25 is to be increased to $617.

Rate Peg in recent years

Year

Rate Peg

Fact Sheet

Media Release

Models

2024-25

Table

Information Paper

Media Release

Model

ESL factor and ESL adjustment factor calculator

2023-24

Table

Information Paper

Media Release

Model

2022-23

Table

Information Paper

Media Release

Model

2021-22

2.0%

Fact Sheet

Media Release

n/a

2020-21

2.6%

Fact Sheet

Media Release

n/a

2019-20

2.7%

Fact Sheet

Media Release

n/a

2018-19

2.3%

Fact Sheet

Media Release

n/a

2017-18

1.5%

Fact Sheet

Media Release

n/a

2016-17

1.8%

Fact Sheet

Media Release

n/a

2015-16

2.4%

Fact Sheet

Media Release

n/a

2014-15

2.3%

Fact Sheet

Media Release

n/a

2013-14

3.4%

Fact Sheet

Media Release

n/a

2012-13

3.6%

Fact Sheet

Media Release

n/a

2011-12

2.8%

n/a

Media Release

n/a

2010-11

2.6%

n/a

n/a

n/a

2009-10

3.5%

n/a

n/a

n/a

2008-09

3.2%

n/a

n/a

n/a

2007-08

3.4%

n/a

n/a

n/a

2006-07

3.6%

n/a

n/a

n/a

2005-06

3.5%

n/a

n/a

n/a

Enquiries:

Sheridan Rapmund

Phone (02) 9290 8430