Two men have survived a light plane crash after the pilot activated an aircraft parachute while 4,000 feet off the ground in the Blue Mountains, west of Sydney.

Police were called to Sayers Street in Lawson about 2:10pm on Saturday after receiving reports that a plane had landed in the front yard of a home.

Police say the two men on board escaped without serious injury. One was taken to hospital as a precautionary measure.

There was some minor damage to the property's fence and nearby powerlines as a result of the unexpected landing.

Witnesses have described seeing the plane spiral down before deploying a parachute and making a "soft" landing.

Lawson Bowling Club president Greg Howlett says he saw the Cirrus SR22 plane go down.

"The motor just cut out. The engine just stopped," he said.

"He started to glide for a little bit and then he went into a spiral ... a very slow spiral.

"He deployed his parachute. It slowed the plane down immensely.

"Then the plane levelled out and it actually came down quite soft, but quite near houses and into some trees."

Another witness said he saw police rescue crews travelling to the crash site, which was on a quiet side street.

Saved by parachute system

The model of the crashed plane, which can carry up to five people, comes with the Cirrus Airframe Parachute System (CAPS).

According to Cirrus' guide to CAPS, the parachute is activated by the pilot pulling a red handle in the cockpit.

Once it is pulled, a cable causes a rocket to ignite which dislodges the CAPS cover, which sits behind the baggage compartment. The parachute is then deployed.

Cirrus says that, as of January this year, 85 lives have been saved when pilots or passengers have activated the system.