First home buyers in NSW will be able to pay an annual property tax instead of forking out for stamp duty in one lump sum, in a key reform in the state budget.

Premier Dominic Perrottet is determined to overhaul the stamp duty system and is pushing ahead with his plans in Tuesday's state budget.

The First Home Buyer Choice is part of a multi-billion dollar housing package to be announced in the 2022/23 NSW budget.

The premier says paying a small annual property tax will make home ownership a reality for more NSW families.

"We want to lower the barriers to owning a home for first home buyers seeking a place of their own," Mr Perrottet said on Tuesday.

From January 16, eligible first home buyers will be offered a choice of paying stamp duty upfront or opting for an annual tax on properties valued up to $1.5 million.

The annual tax will be $400 plus 0.3 per cent of the land value of the property and will not be locked into the scheme if the property is sold.

First home buyers will continue to be eligible to apply for full stamp duty exemption for properties up to $650,000.

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Stamp duty concessions remain in place for properties between $650,000 and $800,000.

Full details will be revealed by Treasurer Matt Kean at midday on Tuesday when he delivers his first budget speech in parliament.

He has stipulated the budget will focus on families and setting NSW up for a brighter, more successful future.

"We are focusing on making the investments that are going to grow the economy, create more opportunities for everyone - whether they live in a city or the bush or whether they are male or female - making sure that everyone is able to realise that potential and fulfil their dreams," he said on Monday.

The government has announced multiple policies in the lead-up to budget day, with billions allocated to childcare, the renewable energy transition, and addressing housing affordability.

Other big ticket items include lifting the public sector wage cap and hiring more than 10,000 additional full-time equivalent health workers.

Opposition treasury spokesman Daniel Mookhey noted the government had pre-committed more than $37 billion in spending, warning the state's residents should brace for higher taxes.

"This cash splash is by far the biggest in NSW history," Mr Mookhey said on Monday.

"The government has had 12 years to deal with so many of the problems that they're now shovelling money out the door desperately to fend off."

Labor has expressed concern about the state's growing debt and the potential risk to its credit ratings. NSW has top-line triple-A ratings from Moody's and Fitch Ratings and is ranked double-A-plus by S&P Global.

December's half-year budget review projected net debt to reach $58.1 billion in 2021/22, growing to $103 billion in 2024/25.

In both cases, the forecasts were revised down from higher projections in the 2021/22 budget handed down in June last year, thanks to extra cash from the sale of WestConnex.

The budget update also forecast a deficit of $3.6 billion in 2022/23 and a deficit of $1.3 billion in 2023/24 ahead of a $449 million surplus in 2024/25.

It predicted a deficit of almost $20 billion in the current 2021/22 financial year.

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