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The tax isn’t perfect, but it’s a good move that could discourage foreign buyers who are pushing up the region’s real estate prices, said Tom Davidoff, an associate professor at the University of B.C.’s Sauder School of Business.

“I think there are going to be foreign buyers turned off by this; 15 per cent is a very big number,” he said. “I just can’t believe anybody is going to pay $750,000 (in foreign buyer tax) on a $5-million home. I guess somebody might, but that’s a hell of a tax to pay.”

The latest government data shows foreign buyers — mainly from China — purchased more than $1 billion worth of B.C. property between June 10 and July 14, and 86 per cent of that was in the Lower Mainland.

Countries that have tried taxing foreign investment report that it slows rising prices, said UBC geography professor David Ley.

“Other cities that have employed a tax at this kind of scale have indeed cooled the market at the top end,” he said. “It does have an effect.”

The tax also applies to corporations that purchase residential real estate (but not commercial properties), and government can examine the citizenship status of directors and the beneficiaries of corporate profits in deciding whether to add taxes.

The foreign buyers tax was a surprise move by Premier Christy Clark’s government, which had recalled the legislature for what it said was mainly legislation to give the City of Vancouver the power to implement a vacancy tax.

Instead, Clark executed an abrupt about-face on her government’s long-held reluctance to intervene in the housing market or discourage foreign investment in B.C.’s economy.