The NSW government has been forced to slash more than $9 billion from expected property-related stamp duty within the past nine months as Sydney’s prolonged housing slump drags on the state’s budget and economy.

The first ever Pre-election Budget Update prepared independently by NSW Treasury reveals the budget surplus for this financial year has been cut by $273 million compared with what was forecast less than three months ago.

The report has also downgraded the economic growth forecast for NSW this financial year and warns the state's economic momentum has “slowed more than previously expected”.

NSW Treasurer Dominic Perrottet. Credit:AAP

Tuesday’s special budget update revised down revenue expected from stamp duty on property transfers by $750 million over the next four years. That follows write downs of $6 billion over four years in the June budget and $2.5 billion in the half-yearly budget review in December.