Water usage charges in NSW rentals: the four conditions
Plenty of Sydney owners pay their tenant's water usage without knowing it, and plenty pass it on when they are not entitled to. In NSW the right to charge a tenant for water usage is conditional, and one of the conditions only arrived on 23 March 2025. Four things decide it. Miss one and the bill stays with the owner.
One: the premises must be separately metered
Water usage can only be passed on where the premises have their own meter, so the reading actually reflects what that household used. In an apartment block on a single master meter with no individual metering, usage cannot be charged to a tenant, however the strata bill is apportioned.
This is the first thing to check on any new management, because it is the one that cannot be fixed with a plumber and an afternoon.
Two: nine litres a minute
The water efficiency measures set a maximum flow rate of 9 litres per minute on shower heads, internal cold water taps, and kitchen and bathroom mixer taps. Fittings above that rate mean the property does not qualify.
In practice this is the cheapest of the four to fix. Flow restrictors and compliant tapware are inexpensive relative to a year of usage charges on a family home.
Not sure how this plays out for your property? A quick call gives you a straight answer.
Three: dual-flush toilets, since 23 March 2025
This is the condition most owners have not caught up with. From 23 March 2025, a rental property must have dual-flush toilets with a minimum three-star Water Efficiency Labelling and Standards (WELS) rating for water usage charges to be passed on to a tenant.
A single-flush cistern is now the difference between charging usage and absorbing it. On an older property with one original toilet, replacing it typically pays for itself inside a single tenancy.
Four: nothing leaking
Taps and toilets must be free of leaks at the start of the tenancy, and again whenever repairs or upgrades are made. A dripping tap is not just a maintenance item. It is a compliance item that affects whether the usage charge is chargeable at all.
It is also the condition most likely to fail quietly midway through a tenancy, which is why a routine inspection that actually checks tapware is worth more than one that photographs the walls.
How the charge is passed on
Meeting the four conditions is only half of it. The charge itself has to be handled properly:
- Usage is billed separately from rent, never bundled into it.
- The tenant is given a copy of the bill or other evidence of the amount.
- The tenant has at least 21 days to pay.
- The amount charged is never more than the water provider charged.
Fixed water and sewerage service charges are a separate matter from usage. Usage is the consumption component, and it is the component the four conditions govern.
The four-point water check on your property
- Is the property separately metered?
- Are shower heads, internal cold water taps and mixer taps at 9 litres a minute or less?
- Are the toilets dual-flush with at least a three-star WELS rating?
- Are any taps or toilets leaking right now?
- If any answer is no, the usage charge stays with the owner until it is fixed
Where this gets checked
Water efficiency is part of how we set a property up, not something we discover in a dispute. The four conditions get checked before a tenancy starts, and tapware gets looked at properly at routine inspections rather than assumed.
For an owner that means the usage charge sits where it should from the first tenancy onward, and a small plumbing job gets recommended when it will actually pay for itself.
A note. This article is general information about NSW tenancy law, not legal advice. Rules change and individual situations differ. Check the current guidance at NSW Fair Trading or seek formal advice before acting.
Not sure whether your property qualifies?
We will run the four-point check on your property and tell you exactly what stands between you and passing on the usage charge.