A Sydney schoolboy who spent two dollars to experiment with a legal LSD-like hallucinogen leaped to his death in front of his family.

Police say Henry Kwan, 17, believed he was invincible when he broke free from the grip of his mother and sister, and jumped from the third-floor balcony of their Killara apartment on Wednesday.

"He lost touch with reality," a senior police source told AAP.

"It was grandiose talk. Like `I can't be killed'."

The Killara High School student allegedly bought the drug from a school mate who has been charged over the incident.