Texas SB 17: Restrictions on Certain Foreign Acquisitions of Real Property

Senate Bill 17 (effective September 1, 2025) restricts certain purchases and acquisitions of Texas real property by specified individuals: governments, companies, and organizations connected to a designated country, it applies to covered transactions occurring on or after that date, and it is considerably more targeted than a blanket ban.

What changed

SB 17 added Subchapter H to Chapter 5 of the Texas Property Code. The law does not simply bar everyone from four countries from owning Texas property. Whether a particular person or entity is covered can depend on citizenship, domicile, immigration status: lawful presence, whether the person is acting as an agent for a covered party, political-party affiliation as described by the statute, corporate ownership, majority ownership, control, the intended use of the property, and, for leases, the lease duration. The final statute's definitions control, and coverage should never be assumed from a person's ethnicity or national heritage.

"Real property" under the law reaches more than farmland or houses. The statute's definition includes agricultural land and improvements: residential property, commercial property, industrial property, groundwater, water rights, minerals in place, mines and quarries, and standing timber, so the law matters to water, mineral, and timber transactions as well as ordinary sales.

Designated countries

The statute identifies designated countries through the national threat assessments published by the U.S. Director of National Intelligence and allows additional designations under the statute's process. According to the official record of the Legislature's deliberations, the 2025 Annual Threat Assessment named four state actors: China, Iran, North Korea, and Russia. Current designation status reviewed July 22, 2026. Statutory designations may change, always confirm the current designations before relying on any list.

Who this may affect, and the exceptions

The final statute contains meaningful exceptions. United States citizens are not covered. Lawful permanent residents are not covered. Qualifying entities owned or controlled as provided by the final statute may fall outside the prohibition. Leaseholds lasting less than one year are excepted. And the statute contains a limited residence-homestead provision for a qualifying individual who is lawfully present and residing in the United States, but that homestead provision is not a general exception for residential, rental, commercial, or investment acquisitions. Whether a particular transaction is covered is a determination the statute's definitions, the courts, and the enforcing agency make, not a conclusion to draw from a summary.

Enforcement

The Attorney General of Texas enforces the law. Enforcement tools include investigation, civil investigative authority, court action involving the property, court-ordered divestiture, appointment of a receiver, and referral for criminal prosecution. A covered company or organization that violates the prohibition faces a civil penalty equal to the greater of $250,000 or 50 percent of the market value of the prohibited interest, and an individual who intentionally or knowingly violates the prohibition may face state-jail-felony prosecution. One nuance matters for titles: except for a prohibited leasehold acquisition, a violating transaction is not automatically void solely because of the violation. Divestiture, voidness, criminal liability, civil penalties, and title validity are separate legal concepts, a deed can remain effective while other consequences proceed.

Proposed OAG enforcement rules, not yet adopted

As proposed, Chapter 67 would address control, entity-level acquisitions, successive short-term lease arrangements, transactions used to acquire control of an entity holding Texas real property, complaints, investigative response periods, interagency coordination, and confidentiality. The proposal also includes a reporting obligation for “facilitating entities,” with examples including mortgage lenders: title insurance companies, property insurers, appraisers, and licensed real-estate professionals. That reporting obligation is a proposed rule requirement, it binds no one unless and until official adoption is published in the Texas Register.

What the law does not do

SB 17 does not bar every foreign national from Texas property, does not strip property already lawfully owned merely because of nationality, and does not make ordinary transactions with U.S. citizens or lawful permanent residents unlawful. It also does not authorize private parties to “enforce” the law against neighbors, enforcement runs through the Attorney General and the courts.

Practical next steps

Buyers, sellers, lessors, and professionals handling transactions that may touch the statute should read the current text of Property Code Chapter 5, Subchapter H, watch the OAG rules page for the Chapter 67 adoption, and obtain qualified legal advice for any specific transaction. Do not rely on secondhand country lists or summaries of the proposed rules.