What U.S. Tariffs Mean for BC Homebuyers in 2025

How rising construction costs could affect your contract, your budget – and your rights – By: Sunny Tathgar – Tathgar Law If you’re planning to buy a home in British Columbia in 2025, especially a pre-sale or newly built property, you may be surprised to learn that international politics could directly impact your purchase. The United States has reintroduced several major tariffs this year, and they’re quietly driving up the cost of building materials across Canada. But it’s not just prices that are changing. These tariffs are influencing how builders structure their contracts, how much homes cost to complete, and what buyers can expect during the process. Understanding the connection between tariffs, construction costs, and your legal rights is essential in today’s market.

What’s Going On with U.S. Tariffs?

In early 2025, the U.S. enacted a package of trade measures that have directly impacted construction-related imports:
  • 25% tariff on steel and aluminum
  • 10% baseline tariff on most imported goods
  • 14.5% duty on Canadian softwood lumber (ongoing from earlier years)
Since many materials used in BC’s construction industry come from or through the U.S., builders are now facing higher costs – sometimes adding $10,000–$20,000 or more to the cost of a single-family home. And those increases are often passed on to buyers.

Why Construction Costs Are Climbing

  • Steel & Aluminum: Used for framing, ducting, window/door frames, and appliances.
  • Lumber: Even with BC’s own lumber supply, cross-border tariffs and global demand are pushing prices higher.
  • Finishes & Fixtures: Items like flooring, tiles, lighting, and hardware are often imported and now subject to higher tariffs or delayed by shipping bottlenecks.
  • Labour & Delays: Material shortages cause timeline overruns, and more time on-site means higher labour costs.
As a result, even modest increases of $5–$10 per square foot can add $9,000–$18,000 to a mid-sized home. Builders are also becoming more cautious, scaling back on upgrades or choosing lower-cost alternatives to protect their margins.

How This Affects You as a Homebuyer

1. You Might Not Be Locked Into Your Purchase Price

Many builders are now including cost escalation clauses in their contracts. These clauses allow them to raise the final price if their own costs increase due to factors like tariffs.
  • Some clauses don’t set a clear cap on cost increases.
  • You may be expected to pay more – even after your financing is pre-approved.
  • Some builders also include “material substitution” clauses that allow them to swap out agreed-upon finishes for cheaper options.
What you can do: Ask if the price is fixed and under what conditions it might change. Have your contract reviewed by a real estate lawyer before signing.

2. You Could Face Delays – With Legal Consequences

Material shortages and higher costs are causing widespread construction delays. If your new home isn’t ready on time, you may need to navigate changes to your move-in date or contract terms. Under BC’s Real Estate Development Marketing Act (REDMA), buyers of pre-sale properties have rights if a developer fails to meet disclosure obligations or makes material changes to a project:
  • You might be able to rescind the contract within a specific timeframe.
  • You could renegotiate based on updated disclosures.
  • If timelines slip too far, you may be eligible for a refund or compensation.
What you can do: Read all delay notices carefully and seek legal advice immediately. These notices often come with strict response deadlines.

3. You May Owe More Tax Than Expected

New homes are subject to GST, which is calculated based on the final sale price. If your home price increases due to cost escalation, you’ll owe more tax at closing. What you can do: Talk to your mortgage broker early about possible cost increases, and ensure your approval has enough flexibility. Even a $10,000 price bump can lead to a $500+ increase in GST alone.

4. You Need to Understand Your Legal Rights

Some builders facing rising costs and economic pressure are attempting to modify contracts or pause construction altogether. In worst-case scenarios, they may walk away from financially unsustainable projects. This could result in:
  • Pressure to sign amendments with higher prices or stripped-down features
  • Delays that stretch beyond your agreed possession date
  • Incomplete or cancelled projects
What you can do: Don’t sign any contract changes without consulting a lawyer. If your builder defaults, you may have legal options – but time is critical.

Final Tips for Homebuyers in 2025

  • Ask the right questions: Is the price fixed? What happens if material costs rise or construction is delayed?
  • Be proactive about legal advice: A small investment in contract review can save you thousands – and stress.
  • Prepare for extra costs: Set aside a financial buffer, especially if buying at the top of your approval limit.
  • Watch for builder red flags: If a builder is vague about timelines, pricing, or materials, proceed with caution.

In Summary

U.S. tariffs are doing more than making materials expensive, they’re reshaping the financial and legal landscape of home buying in BC. If you’re purchasing a new build or pre-sale home in 2025, it’s important to understand how these forces could affect your bottom line – and your rights as a buyer. With clear guidance, smart questions, and the right legal support, you can navigate this market with confidence – and avoid costly surprises. Contact Sunny Tathgar today for a free consultation.