China's Ministry of Finance has issued detailed rules pertaining to the development of a low-rent housing system in the country.

The State Council, or cabinet, had earlier issued a circular in August saying that the system is to come into effect on Jan 1, 2008.

The rules have made it clear that the funds earmarked for the system will come from all investment gains from the national Housing Provident Fund less provisions and expenses, and at least 10 pct of all land use right transfer proceeds, among other revenue sources.

The State Council in August released a document laying out the guidelines to set up an affordable and low-rent housing system accessible to low-income families in urban areas due to the recent hike in property prices.

The usage of the funds will be tightly monitored at local government levels, and any violations of the rules will be subject to severe punishment, the Ministry of Finance added.