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Houses in Arbutus Ridge and the downtown core are pictured in a view from MacKenzie Heights in Vancouver, B.C., on Monday October 5, 2015. Vanouver’s tiered home tax system was instituted in 1987, when homes were much cheaper.DARRYL DYCK/The Globe and Mail

The B.C. government could easily make Vancouver's red-hot housing market more affordable by raising the property transfer tax on high-end homes and cooling off demand from wealthy offshore buyers, an expert told a development industry forum on foreign ownership Wednesday.

David Ley, a geography professor at the University of British Columbia who studies housing bubbles, said implementing a more progressive property transfer tax on the high-end homes, while keeping such levies low on cheaper properties, is an "easy" policy option that would create a trickle-down effect and lower prices throughout Metro Vancouver.

B.C. Finance Minister Mike de Jong said Wednesday the provincial government is looking at doing just that. But he said although the province has been under pressure to act to cool the heated real-estate market, he has to move carefully. "I have come to believe that for every taxation action there can be a reaction."

Mr. de Jong's comments and the industry forum come as a Globe and Mail investigation details how wealthy foreign investors in Vancouver are able to pay little or no income or capital gains taxes.

The forum heard that in London, property transfer taxes on luxury homes were recently raised to 12 per cent, while Hong Kong and Singapore raised theirs to 15 per cent on the most expensive residential real estate.

Governments that chose to hike the property transfer taxes "have chosen to do [so] to try to maintain some control of a very, very volatile market in those places," Prof. Ley told a well-heeled crowd of young professionals at the sold-out Urban Development Institute event on foreign ownership.

"And that is really important, because there is a lot of evidence that price pulses through a metropolitan market come in through the top end."

The province's home buyers must pay a 1-per-cent tax on the first $200,000 of their purchase price then another 2 per cent on the amount above $200,000. That two-tiered tax system was instituted in 1987, when homes were much cheaper than today.

That's also when wealthy immigrants from East Asia first began buying in large numbers, Prof. Ley said.

Using statistics from Citizen and Immigration Canada, Prof. Ley estimates roughly 200,000 millionaires have settled in Metro Vancouver through investor immigration programs since the 1980s. Those numbers surged in the past decade, when 70,000 have arrived, he said.

Fellow panel member Cameron Muir, chief economist at the B.C. Real Estate Association, told the crowd of 200 people that he simply didn't agree with Prof. Ley's assertion that such a trickle-down "Republican-style" effort would affect the affordability of the whole market.

Densification and a growing population vying for a scarce supply of single-family homes in Vancouver proper are to blame for the years-long surge in prices, he said.

"We are a metropolitan area of 2.5 million people with about one million households," Mr. Muir said. "So if we talk about the housing crisis, it's a crisis for those who maybe thought they could buy a home in Point Grey, which at least in my life experience I've never been able to afford.

"It's because we're building condominiums to meet the additional demand, but we're not meeting that for single detached homes."

Even if, according to the scarce data available, foreigners are buying most of the region's top homes, those transactions only represent a fraction of the overall market, Mr. Muir added.

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