The BC Government broke new ground this week announcing a hefty tax on foreign home buyers.

The British Columbia government broke new ground this week, announcing a hefty tax on foreign home buyers in the Metro Vancouver area, something Ontario quickly said it will watch closely as a possible way to cool off Toronto's hot housing market.

The B.C. tax will force buyers who aren't Canadian citizens or permanent residents to pay an extra 15 per cent of the fair market value of any residential property they acquire, on top of the existing land-transfer fee — an extra $300,000 on a $2-million home, for example. Finance Minister Mike de Jong said revenue from the surcharge would be used to fund housing, rental and support programs.

• B.C. to tax foreign buyers of Metro Vancouver homes

• Foreigners spend $885M on Vancouver property in just 5 weeks

Analysts disagree on how much foreign buyers are driving up prices in the Vancouver-area market, as opposed to other factors like low interest rates, zoning issues, a lack of social housing and the city's all-around appeal. But regardless, the government is hoping that its tax will soften demand for homes and make housing more affordable, de Jong and Premier Christy Clark said. Experts and people in the industry who CBC News spoke to were of several minds.

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