Ratepayers across NSW will be slugged with higher council fees, with the pricing regulator giving the green light on rate rises of up to 5.5 per cent in 2024/25.
The NSW Independent Pricing and Regulatory Tribunal (IPART) said on Tuesday that council rate pegs - the maximum amount councils can lift their general income for the year - would increase from 4.5 to 5.5 per cent.
The increase is set to add to cost of living pressure on many NSW residents amid stubbornly high inflation and elevated mortgage repayments.
IPART chair Carmel Donnelly said the agency's updated directive to councils "more accurately reflect the increase in costs for each council".
"We understand ratepayers across the state are facing cost-of-living pressures including the affordability of council rates," Ms Donnelly said.
She said a new methodology used to calculate the annual increases would "better account for the diversity among NSW councils and help ensure ratepayers contribute only to costs relevant to their local government area".
The rate pegs were based on employee cost increases, forecast inflation, changes in Emergency Services Levy contributions and population growth, Ms Donnelly added.
IPART's rate peg limits the total amount councils can increase rates each year to protect ratepayers from excessive increases.