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A real estate sign reading "Sold Over Asking" stands on display outside a townhouse in Richmond, British Columbia, Canada, on Sunday, Dec. 11, 2016.

Ben Nelms/Bloomberg

British Columbia will soon allow international citizens working and paying taxes in the province to bypass the 15-per-cent foreign home buyer's tax in a bid to make the province more attractive to skilled professionals.

Premier Christy Clark announced the coming move Sunday after being asked about U.S. President Donald Trump's highly controversial ban on certain Muslim immigrants.

"We believe the best and the brightest should be able to come to British Columbia," she told reporters during a short media scrum as Vancouver's Chinese New Year parade was starting.

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"We're going to lift the foreign owners' tax on people who have work permits, who are paying taxes and living in British Columbia, as a way to encourage more people to come."

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Ben Chin, the Premier's head of communications and issues management, said that Ms. Clark had asked British Columbia's Finance Minister a little while ago to begin looking at lifting the levy for international buyers working. Mr. Chin said the exact details of the exemption have not yet been finalized, but the changes will soon be enacted through a provincial order in council.

He added that there is no plan to extend the tax beyond the 22 communities it currently affects and into Greater Victoria, which Canada's housing agency recently singled out as an area experiencing a dangerous surge in home prices.

Tom Davidoff, an economist at the University of British Columbia, welcomed the province tying the tax exemption to someone's work permit – a federal document that is hard to forge. But he worried there could be a massive loophole if foreign buyers were allowed to duck the tax by paying nominal amounts of provincial income tax on their global wealth. He added that the new exemption should not lead to a new spike in foreigners buying in Metro Vancouver's lagging market because relatively few people are on work permits.

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The latest provincial government data showed that foreign citizens edged back into Metro Vancouver's flagging real estate market months after the province introduced the 15-per-cent tax at the beginning of August, but the percentage of buyers who are not Canadians or permanent residents is still well below the double-digit rates seen before the new tax hit the sector.

In and around Vancouver, foreign citizens were involved in 4.1 per cent of all homes bought in November, up from 3 per cent the month before and more than quadruple the near-zero rate recorded in the month after the province launched the levy.

Mr. Chin said this new exemption – which is similar to alternative proposals from the Opposition New Democrats and a group of more than 40 other local economists led by Prof. Davidoff – is coming because the B.C. Liberal government is narrowing its focus after creating the much broader tax.

"Now that we've had a pretty good half-year's worth of data, we can make a move to encourage and continue to attract people that can add to our economy," he said.

Vancouver MLA David Eby, the NDP's critic for housing, said in failing to make this exemption at the beginning, the province brought seven months of unnecessary hardship for employers trying to recruit foreign talent already weary of the region's unaffordable housing.

"The weird thing was we were taxing the workers who wanted to come and help build our province and we weren't taxing all the speculators who got their money into the market before the foreign-buyer tax was proposed," he said.

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By exempting foreign buyers who are working in and around Vancouver, the Premier has now implemented half of the NDP's original proposal to zero in on foreign capital – not citizens, Mr. Eby said.

"Now she needs to impose the additional property taxes on people who buy homes here, but who don't pay provincial income tax here and haven't been paying provincial income tax here."

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