Texas Foreign Property Rules: Who Is Restricted from Buying Real Estate?

(TEXAS, USA) Texas Senate Bill 17 now blocks people, companies, and governments tied to designated countries from buying most Texas real estate. The law is now Texas Property Code Subchapter H, and its restrictions took effect on September 1, 2025 after Governor Greg Abbott signed it on June 20, 2025.

The measure covers China, Iran, North Korea, and Russia. It reaches homes, farmland, commercial buildings, industrial sites, minerals, timber, water rights, and groundwater. For immigrants, visa holders, landlords, brokers, and investors, the new rules changed how every Texas purchase must be checked.

Texas Property Code Subchapter H Reaches Far Beyond Home Sales

Texas Senate Bill 17 uses a broad definition of prohibited acquisition. It covers direct purchases and indirect control through shell companies, subsidiaries, or other ownership layers. The law applies to purchases, foreclosures, gifts, easements, leases of one year or more, and other property interests.

That wide reach matters because many people first assumed the law targeted only outright home purchases. It does not. Under Texas Property Code Subchapter H, a buyer can run into trouble if the person or entity has a covered tie to a designated country. The Texas governor can also expand the list after intelligence reviews or consultation with the Department of Public Safety.

The state says the law responds to national security concerns. Supporters argue it protects Texas food supply, energy assets, defense sites, and land. Critics say it invites discrimination and places lawful residents under suspicion during routine property transactions.

According to analysis by VisaVerge.com, the biggest change is not just who cannot buy. It is the new level of scrutiny placed on every deal involving foreign nationals, cross-border ownership, and complex investment structures.

Who Faces Restrictions Under the New Law

The ban reaches several groups. It covers governmental entities from designated countries, individuals domiciled there, citizens of those countries even if they live elsewhere, and some agents or ruling party members. It also covers companies that are headquartered in a designated country or controlled, owned, or mostly held by covered persons or governments.

That means lawful presence in the United States does not automatically protect a buyer. A student on an F-1 visa or a worker on an H-1B visa still needs to check whether the homestead exception applies. Citizenship, domicile, and ownership structure all matter.

The practical effect is already visible in closings. Title companies, lenders, and agents now ask for more documents. They want proof of citizenship, residency, entity ownership, and exemption status before a deed changes hands. That extra review adds time and cost for everyone involved.

The law also creates pressure for lawyers representing international investors. A fund with limited partners from a designated country can face a tougher review, especially if the structure leaves any room for prohibited control.

Exemptions Protect Many Legal Residents

SB 17 did not shut the door on every foreign-born buyer. It includes several exemptions that protect many lawful immigrants and residents. U.S. citizens may buy regardless of dual citizenship. Lawful permanent residents may also buy without restriction. Entities owned only by U.S. citizens or green card holders are exempt too.

One of the most important carve-outs is the residential homestead exception. Individuals lawfully present and living in the United States can buy one primary residence for personal use, even if they are citizens of a designated country. That exception does not cover second homes, rental properties, or commercial investment purchases.

Short-term leases under one year are also allowed. Long-term leases are not. A two-year lease signed by a covered person outside the homestead rule falls within the restriction.

• Allowed: U.S. citizens, green card holders, and one primary home for certain lawful residents.
• Blocked: Farmland, business property, and long leases tied to covered persons.
• Conditioned: Entities with mixed ownership must prove no prohibited control.

These exceptions help many families, but they do not remove uncertainty. Lease renewals, older contracts, and private funds with layered ownership still raise questions for closing agents and counsel.

Enforcement Brings Heavy Penalties

The Texas Attorney General leads enforcement. The office can investigate suspicious transactions and file cases in district court. If a violation is proven, the court can order divestiture, which means forced sale or forfeiture of the property.

Penalties are steep. Companies and organizations can face civil penalties of up to $250,000 or 50% of the property’s market value per violation. Individuals can face a state jail felony, which carries up to 2 years in jail and a $10,000 fine.

Pre-September 1, 2025 ownership is grandfathered. Existing owners can keep, manage, improve, lease under prior rules, or sell the property. But any new acquisition is barred if the buyer falls inside the prohibited class.

For immigrants, the property law does not change visa status by itself. Even so, a violation can trigger records and create problems during later immigration filings, especially when attorneys review personal history or financial conduct. Buyers from designated countries should keep passports, visa copies, domicile records, and exemption evidence ready for closing.

A Law Shaped by Security Fears and Legal Fights

Sen. Lois Kolkhorst, a Republican from Brenham, authored the bill. Supporters say the law answers federal threat assessments that identify espionage, influence operations, and resource control risks. Governor Abbott and other backers frame SB 17 as a defense of Texas land and infrastructure from hostile actors.

Opponents see something else. Civil rights groups, Democrats, and Asian American advocates say the law echoes earlier anti-Asian property bans. They also warn that lawful residents from designated countries may face profiling during routine sales conversations. Two Chinese nationals filed suit in July 2025, arguing that the law violates equal protection and is preempted by federal foreign policy rules.

One challenge was dismissed for lack of standing, but the fight continues. Similar legal battles over Florida’s foreign land law have already drawn national attention. Texas now sits at the center of the same debate.

Real Estate Deals, Investors, and Immigration Pressures

Six months after implementation, the law has changed how Texas real estate moves. Deals involving Chinese and Russian capital now face more audits. That affects hotels, factories, agribusiness, and private funds with cross-border investors. Real estate agents also face pressure to verify nationality and ownership before contracts progress.

For visa holders, the law narrows what is possible. A student from Russia can still buy one primary residence if lawfully present and using the home personally. That same student cannot buy farmland, an office building, or a rental unit. A worker from North Korea faces the same split.

Texas lawmakers also created a broader signal for the country. Florida, Arkansas, Louisiana, Alabama, and Utah have passed similar measures. Other states are watching the Texas courts closely. For now, the official law text remains available through Texas Legislature Online, which provides the public bill record and statutory references.

Texas Property Code Subchapter H has changed more than ownership rules. It has changed how buyers are screened, how lawyers draft deals, and how immigrants from designated countries weigh their place in the Texas market.