IED found at scene of fatal NSW fire

An improvised explosive device has been found near the garage where a man burnt to death, NSW police say.

The body of the 58-year-old man was found at a residential property in Portland, near Lithgow, in the state's central west on Friday morning.

Neighbours reported hearing a loud explosion early on Friday morning.

"Police believe that the man suffered fatal injuries after an explosion in a rear garage," NSW police said in a statement.

"An improvised explosive device has been located at the scene."

Homicide and property crime detectives are working on the case, along with local police.