Water rights

Operating rules and constraints

Operating rules for water right holders

Water management licences issued to major water utilities provide further guidance to the rules established in the Water Sharing Plan for the Kangaroo River Water Source and the Water Sharing Plan for the Greater Metropolitan Region Unregulated River Water Sources 2011  on how they can fulfill the responsibilities assigned to them (Table A1). For water right holders (major water utility, local water utility or individual holder), provisions made in legislation and water management licences define:

  • water entitlements
  • temporal, spatial and volumetric conditions of using the entitlements
  • environmental and any other obligations.
Water restriction rules

Water restrictions for the area managed by Sydney Water are authorised by the Minister administering the Sydney Water Act 1994. Urban utilities determine and manage water restrictions outside the Sydney water management region. For further information on water restrictions in the Sydney region, see Water restrictions in Water access and use.

Water entitlements and other statutory water rights

The New South Wales Office of Water manages the entitlements in the Sydney region in accordance with the Water Management Act 2000 (New South Wales). All licences are registered with the Lands Title Office and with any changes to the water title (water access licence) are processed by that department. The New South Wales Office of Water manages the day-to-day operation of the entitlements including the maintenance of allocation accounts.

Licences under the Water Management Act are separated into licence categories that provide both:

  • a separated water entitlement that can be traded or sold independently of land
  • an indication of the security level associated with the licence.

The Water Management Act sets the priorities for water sharing and defines them depending on water access licence/entitlement categories. The environment has first priority, followed by basic rights (domestic and stock rights, harvestable rights and Native title rights) and then all other licensed rights.

Water access entitlements

As defined on the New South Wales Office of Water website, water access licences entitle licence holders to specified shares in the available water within a particular water management area (the share component) and to take water at specified times, rates or circumstances from specified areas or locations (the extraction component). 

The share component of the access licence is similar to the entitlement volume which was previously applied under the Water Act 1912 and is expressed as a unit share or in the case of specific purpose licences (such as a local water utility and domestic and stock use), a volume in megalitres. The amount of water a licence holder is allocated as a result of an available water determination and the amount they can take in any one year is based on their share component. Other rules, such as carry-over, are also based on the share component.

An announcement regarding the water availability determination is made with regards to a water source and access licence category and applies to all access licences in the water source within that licence category. The key elements of an announcement are:

  • water source
  • licence category
  • announcement type
  • date or period that the announcement applies to.

Shares in available water may be assigned generally or to specified categories of water access licences. The specified categories of water access entitlements defined in the Water Management Act are available on the New South Wales Office of Water website.

Surface water rights and entitlements

Surface water rights and entitlements are broken down into several categories that define their priorities and security. Licence categories that are found in the Sydney region include major utility, local water utility, domestic and stock and unregulated river access licences. 

There are also three basic landholder rights applicable to the Sydney region that are outlined below.

1. Domestic and stock rights

Under the Water Management Act, an owner or occupier of land which is overlaying an aquifer or has river, estuary or lake frontage can take water without a licence under domestic and stock rights for the following purposes:

  • for domestic consumption, e.g. drinking, cooking, washing, watering household gardens and filling swimming pools associated with domestic premises on the property
  • to water stock on the property.

This water cannot be used for irrigating crops that will be sold, bartered or used for stock fodder, for washing down machinery sheds or for intensive livestock operations.

2. Native title rights

Native title rights allow Aboriginal native title holders (as determined under the Native Title Act 1993 (Commonwealth) to extract water for a range of personal, domestic and non-commercial communal purposes. In the National Water Account these are referred to as Cultural rights.

3. Harvestable rights

Harvestable rights allow landholders in most rural areas to collect a proportion of the runoff on their property and store it in one or more farm dams up to a certain size. Since this does not involve extraction directly from the river it is not generally provided for in water sharing plans.

Groundwater rights and entitlements

Groundwater entitlements and rights represent less than 6% of all water rights in the Sydney region.

Anyone who holds a groundwater basic right can extract water to meet basic requirements for household purposes (non-commercial uses in and around the house and garden) and for watering of stock. This water cannot be used for irrigating crops or garden produce that will be sold or bartered, washing down machinery sheds or intensive livestock operations.

Entitlements held by urban utilities is available from three groundwater units: Goulburn Fractured Rock, Sydney Basin–Nepean Sandstone and Sydney Basin–Richmond Sandstone. There is no other groundwater entitlement conferred to management authorities to supplement centralised water supply to the Sydney metropolitan area.

More information on groundwater rights is available under Water access and use and more details can be found in the Water Sharing Plan for the Greater Metropolitan Region Groundwater Sources.

Fish River Water Supply Scheme

The volume of water supplied from the Fish River Water Supply Scheme is based on water supply agreements between State Water and its customers. The three organisations operating within the Sydney region with water entitlements from the scheme have a maximum annual quantity entitlement as shown in Table P4 (sources: Delta Electricity, Lithgow City Council and Sydney Catchment Authority).


Table P4  Organisations operating within the Sydney region with water entitlements from the Fish River Water Supply Scheme


Maximum Annual Quantity (ML)

Delta Electricity


Lithgow City Council


Sydney Catchment Authority


Each organisation's maximum annual quantity is available for extraction in a given year if there are no restrictions. When the storage volume of Oberon Reservoir falls below 50%, the water allocation for major consumers is determined based on a restriction table. Restrictions vary with the storage level. Entitlement holders are allowed to carryover their unused allocation up to a maximum of 20% of the maximum annual quantity.

Hydro-electric power generation

As outlined in their Water Management Licence Eraring Energy holds an annual entilement of 4,021 ML under the category of Major Utility (Power generation). This right is used to service interchanges between Lake Yarrunga and Fitzroy Falls Reservoir and between Bendeela Pondage and Lake Yarrunga at any time for hydro-power generation. Eraring Energy is permitted to increase the interchanging volume between Lake Yarrunga and Fitzroy Falls Reservoir under the following circumstances:

  • during periods of unusually high power demand
  • in the event of failure of other generating stations in the State energy network or major power failure
  • at times when Fitzroy Falls Reservoir is spilling to Yarrunga Creek, subject to any environmental flow requirements in Yarrunga Creek.

Further details of Water rights applicable to the Sydney region can be found under Water access and use.

Water allocations

The water year for water allocations and use in the Sydney region is from 1 July to 30 June. There is a formal available water determination process at the commencement of the water year that is managed by the New South Wales Office of Water. The amount of water available for extraction and the rules pertaining to that water is outlined in the relevant water sharing plan. Carry-over rules and other rules associated with that extraction are available in the Water Sharing Plan for the Greater Metropolitan Region under the section 'Limits to the availability of water'.

Entitlement holders are able to draw their maximum entitlement volume unless, due to a limited supply of water, authorities announce on an 'as needs' basis.

There is no allocation determination for basic rights per se; however, in times of limited supply, there may be restrictions on taking water for domestic and stock uses under riparian rights and groundwater basic rights.

Trades and water rights transfers

Water market rules: interstate trading

No inter-state trading is permitted as outlined under Clause 69 of the Water Sharing Plan for the Greater Metropolitan Region Unregulated Water Sources.

Water market rules: inter-valley and within-valley trading

Water trading rules for the region are defined in the applicable water sharing plan in accordance with the Water Management Act: however, the required mechanisms for such transfers do not currently exist. As a result no water trading occured in the Sydney region.


Restrictions on trade

As the mechanisms for the trading of water are not yet in place there was no trading in the Sydney region.