State and federal counter-terrorism police have raided a property at Heckenberg in Sydney's south-west as part of an investigation into the financing of terrorism overseas.

Officers from the Australian Federal Police (AFP) and New South Wales Police removed a number of items from the house on Tantangara Street.

The ABC understands the investigation is focusing on brothers Mohamed and Hazem Zuhbi, who are believed to be supporters of the so-called Islamic State (IS).

Mohamed Zuhbi has previously been under Australian Security Intelligence Organisation (ASIO) scrutiny after travelling to Syria and his bank accounts were frozen earlier this year.

The FBI in the United States has accused Mr Zuhbi of being a middleman for IS and recruiting people to fight for them in Syria.

The father of the brothers, Baraa Zuhbi, also had his home searched today and was seen arriving at the Heckenberg property this afternoon.

An unidentified man arrived at the house that was raided by counter-terrorism police. ( ABC News: Jessica Kidd )

Mohamed Zuhbi has previously told the ABC in an interview with PM that he was not a spokesman for Islamic State and that he had travelled to Syria to do humanitarian work.

The AFP-led search is part of an information-gathering exercise into the financing of terrorism overseas and police do not expect to make any arrests or lay any charges today, the ABC understands.

AFP officers carried out black garbage bags of evidence during the search, which started at 7:00am this morning.

Police have now left the property, but said the investigation was ongoing.

Australian Federal Police officers have raided a house in south western Sydney. ( Supplied: Jamee-Lee Azzopardi )

The investigation is new and an AFP spokesman confirmed that members of the NSW Joint Counter Terrorism Team were conducting "operational activity" at the residence.

The spokesman said the allegations did not relate to any threat against the general public.

AFP Commissioner Andrew Colvin has refused to confirm any other details about the raid.

"[The raid] was just part of an ongoing operation, investigation that we've got in Sydney," Commissioner Colvin said.

"Like all of our counter terrorism investigations they tend to roll on.

"This is another one of those, this investigation ... it's not a threat to the public, it relates to terrorism financing and while it's ongoing I'll confine my comments to that."

'It's scary, but you don't really know the facts'

Neighbour Jamee-Lee Azzopardi said police had been coming in and out of the house all morning.

Neighbour Jamee-Lee Azzopardi says police have been coming in and out of the property. ( ABC News )

"It looks like on the door it's been broken in or forced," she said.

Ms Azzopardi said it was concerning that the search had to do with terrorism.

"It's scary, but you don't really know the facts, until you actually hear it, so not jumping to any conclusions."

She said a young family with three preschool or primary school-aged children rented the house, but she had not seen the husband in many months.

"He hasn't been here in months, I mean months ... we don't know where he is," she said.

"They're pretty quiet, they keep to themselves, they wave every now and then. The wife usually comes and drops off the kids, she's always looking after the kids, there's no-one else."