The NSW Government has committed to a water tax of up to $200 per household, which will cost the state an estimated $5.8 billion over the next 10 years.

The levy will be introduced in December next year, with an increase to $400 per household and an increase for those aged 65 and over.

Under the new scheme, households will pay an average of $10.65 per household on water, with households with children paying an average rate of $14.75 per household.

The average price of a family’s water service will rise from $4.00 per 1,000 litres to $5 per 1 of 1,500 litres.

The NSW Government is expected to provide the first annual report on the water tax in September, but has not released any details about the levy, or when it will go into effect.

It is understood the water levy will cost around $4 billion a year to run over the 20-year period.

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