A surging Sydney property market will help deliver a big boost to the NSW bottom line in the coming financial year.
After predicting a $402 million surplus in December, Tuesday's state budget forecast an underlying surplus of $713 million for the 2015/16 financial year.
The headline surplus was forecast at $2.5 billion, but it was boosted by a change in the way rail lines and facilities are accounted for in the budget.
The government also forecast surpluses over the forward estimates, tipping an underlying $756 million in 2016/17, $811 million in 2017/18 and $895 million in 2018/19.
Revised budget forecasts for 2014/15 showed a surplus of $2.1 billion, thanks in large part to the booming housing market, although Treasurer Gladys Berejiklian stressed residential stamp duties only made up about 10 per cent of government revenues.
In its budget papers released Tuesday, the government pointed to "higher-than-expected transfer duty receipts associated with the buoyant property market" as a key driver for stronger revenues.
"Transfer duty has significantly exceeded expectations in 2014/15 reflecting the continuing boom in the property market supported by historically low interest rates and unprecedented investor demand," government's budget papers stated.
Revenue from transfer duties flowing from both residential and commercial property transactions would hit $7.8 billion in 2015/16, up from $7.3 billion in 2014/15, the government said.
The government flagged that while stamp duties would continue to contribute to revenue in the period ahead "uncertainty remains around the length of the current housing cycle and the influence of historically low interest rates".
"From 2015/16 growth in revenues is expected to be more subdued, with current projections for revenues to grow by only 2.8 per cent on average over the budget and forward estimates period," the government said.
Revenues were being weighed down, it said, by factors including a loss in dividends from government businesses flowing from Australian Energy Regulator determinations as well as less GST revenue.
At June 30, net debt is estimated to be around $6.7 billion, or around 1.3 per cent of gross state product.
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