His younger brother was George Rae, a British banker and Pre-Raphaelite Art Collector based in Liverpool.
He studied law and in 1839 went to Australia to take up the position of secretary and accountant to the North British Australasian Loan and Investment Company.
In April 1857 the city council of Sydney was again constituted, and in July Rae was appointed secretary and accountant to the railway commissioners.
Rae wrote The Mayor's Fancy Ball, a long humorous and satirical poem on this event which was printed anonymously in four issues of The Sydney Morning Herald in April 1845.
His first acknowledged publication was The Book of the Prophet Isaiah rendered into English Blank Verse, which was published in 1853.