In large cities, rainwater tanks are used to save mains water, but in peri-urban and rural areas, rainwater tanks are used as a sole water supply for many households, as these regions often do not have any other means of water supply. This paper investigates the performance of a rainwater harvesting system (RWHS) in peri-urban regions of Greater Sydney, Australia. Considering the daily rainfall data over the entire period of record at ten different locations, it has been found that a 5 kL tank can meet 96% to 99% of the demand for toilet and laundry use depending on the location in Greater Sydney regions. However, in the driest year, a 5 kL tank can meet 69% to 99% of toilet and laundry demand depending on the location. Based on the results of life cycle cost analysis, it has been found that a 5 kL tank has the highest benefit-cost ratio (ranging from 0.86 to 0.97) among the eight possible tank sizes examined in this study. Interestingly, for a 5 kL tank, with a combined use (i.e., toilet, laundry and irrigation), the current water price in Sydney needs to be increased by 3% to 16% to achieve a benefit-cost ratio exceeding one. A set of regression equations are developed which can be used to estimate reliability using the average annual rainfall data at any arbitrary location in the peri-urban regions of Greater Sydney. The method presented in this paper can also be applied to other Australian states and other countries to estimate water savings and reliability of a RWHS using daily rainfall data.