The Ministry of Land and Resources is to start sharing real estate registration information with the Ministry of Civil Affairs to verify whether people qualify for social welfare, according to a circular released on Wednesday.
The circular said such an information exchange is crucial to judging a household's financial situation, with the aim to "precisely spot" families in need and prevent fraudulent claims.
It stressed that the checks will only target families receiving social welfare, and warned that those who abuse or leak the data will be punished.
To access the real estate information, local civil affairs departments will first need written permission from the family, and then can apply to the property registration authorities, the circular said.
Registration authorities will be required to provide the information as soon as possible, including the location, area, purpose of use, co-ownership and registration date of a property, which will be used to verify if a family is eligible for financial aid or other benefits.
People who disagree with the information exchange can appeal to the registration authorities and request a review, the circular added.
In recent years, China has seen many people trying to swindle basic living allowances - designed to help low-income groups - by proving false income documents or offering bribes to officials.
Lou Jianbo, a law professor at Peking University who specializes in real estate law, described the move as necessary and said it can deter fraud to some degree, but there are loopholes.
"Some properties are not registered, or are registered under the name of other people," he said, adding that leaking such information could lead to safety risks and privacy concerns for property owners.