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The city of Shanghai Monday unveiled a set of preferential housing policies for the city's low-income families.

According to a regular press conference by the Shanghai municipal government, the city will partly exempt loan interest for economical apartments, priced at less than 3,500 yuan (US$423) per square metre and no larger than 90 square metres for each, later this year.

"Relevant government departments are finalizing the details of the new policy and all middle- and low-income families will soon enjoy being able to buy an apartment of their own,'' said Jiao Yang, a spokeswoman of Shanghai municipal government at the conference.

The city's housing prices have been increasing rapidly since 1999, and the price of the city's previously occupied apartments had surged to 5,600 yuan (US$677) per square metre on average in July, according to the latest official statistics.

Shanghai Mayor Han Zheng pledged earlier that the city will offer at least 3 million square metres of cheap apartments, priced between 2,800 to 3,500 yuan (US$339 to 423), annually within the next three to five years.

The new policy will encourage low-income families to buy relatively larger apartments to improve living conditions, said Jiao.

In addition, the city's affordable housing policy will cover another 5,000 poor families, with a living area of less than 7 square metres per person, by the end of this year, according to the conference.

By then, more than 10,000 local families of modest means will be able to move into larger apartments as the government helps pay part of the rent money, said Jiao.

The Shanghai government will also exempt taxation on suburban farmers for this year, according to the conference.

This is a further step of the city's agriculture taxation reforms, which started last March, according to Jiao.

Taxation revenues from the city's agriculture sector dropped from 425 million yuan (US$51 million) in 2001 to 143 million yuan (US$17 million) last year, according to official statistics.

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