Texas’ New Foreign Ownership Law: What It Means for Buyers in Today’s Market

In real estate, most new laws don’t meaningfully change how deals get done.  

This one is different.

In 2025, Texas passed Senate Bill 17, a law that restricts certain foreign individuals and entities from purchasing real estate in the state. As this law is now being implemented—and more importantly, as enforcement rules and penalties are being layered on top of it—it’s starting to reshape how real estate transactions actually happen in Texas.

Whether you’re buying your first home, purchasing land, or structuring a commercial deal, this is one of those shifts you want to understand early.

A Broader Reach Than Most Expect

At its core, the law prohibits certain foreign individuals, companies, and governments—particularly those tied to China, Russia, North Korea and Iran—from acquiring real property in Texas.

That part is straightforward.

What’s not as obvious is how broadly “real property” is defined.

We’re not just talking about land purchases or large commercial acquisitions. The law covers residential homes, industrial sites, agricultural land, and even long-term leasehold interests. In other words, nearly every type of real estate transaction falls somewhere within its scope.

For most buyers, that doesn’t mean you can’t purchase property—but it does mean transactions are now subject to a higher level of scrutiny.

What’s Changing in Residential Transactions

If you’re a U.S. citizen, your ability to buy property hasn’t changed.

What has changed is the process.

You may be asked for additional information—citizenship status or, if purchasing through an entity, details about who owns or controls that entity. For many buyers, especially those using LLCs, this is new.

In most cases, it’s simply more documentation and a slightly more involved closing process. But it reflects a shift toward greater transparency in real estate transactions.

Where This Really Starts to Matter: Commercial Real Estate

While residential buyers will feel this as a process change, the real impact shows up in commercial deals.

Texas has long been a magnet for global capital. Industrial developments, land plays, and large-scale investments often involve layered ownership structures and partners from multiple jurisdictions.

This law introduces a new variable into that equation.

Now, it’s not just about who is signing the contract. It’s about who is behind the entity, who controls it, and whether any part of that structure connects back to a restricted party.

That matters because even if a transaction closes, it doesn’t necessarily mean the risk is gone.

The Attorney General has the authority to investigate deals after the fact and, if a violation is found, force the divestiture of the property. That means a buyer could be required to sell—regardless of how far along the investment is.

For developers and investors, this creates a new layer of due diligence that simply didn’t exist before.

The Quiet Shift: Agents Are Now Part of the Equation

Here’s where things take a meaningful turn.

Alongside the law, the state has proposed enforcement rules that introduce a concept most agents haven’t had to deal with before: a duty to report.

Under these rules, a “facilitating entity”—which includes real estate agents—may be required to submit a complaint if they know, or reasonably should know after due diligence, that a transaction violates the law.

That doesn’t mean agents are expected to investigate every deal like an attorney or regulator. But it does mean that ignoring obvious red flags is no longer a safe position.

In practical terms, agents are becoming part of the compliance framework.

That’s a significant shift from the traditional role of simply advising and facilitating.

Does this new law interfere with Fair Housing Laws?

No, but this is where things require a bit more care.

The Fair Housing Act prohibits discrimination based on protected characteristics, including national origin. At the same time, Texas law now requires more awareness around citizenship and ownership structures.

The key distinction is this:

Texas law regulates who can legally acquire property. Fair Housing regulates how people are treated during a transaction.

If questions about citizenship or ownership are asked selectively—based on appearance, accent, or assumptions—that can create Fair Housing issues. The same applies to refusing to work with a client based on perceived background.

The solution is straightforward: apply the same process to every client, every time. 

What Buyers and Investors Should Take Away

For most people, this law won’t stop you from buying property in Texas.

But it will change how transactions are approached.

If you’re purchasing as an individual, expect a bit more documentation. If you’re using an entity, be prepared to answer questions about ownership and control. And if your deal involves international connections, it’s worth slowing down and making sure everything is structured properly before moving forward.

For investors and developers, the takeaway is even more direct: understanding your capital stack and ownership structure is no longer optional. It’s part of the deal.

Final Thought

California has filed suite asserting the new law is unconstitutional and oversteps several federal statutes including FIRRMA and DFIUS rules, so we will see how it affects the future of foreign purchases.

If you’re navigating a purchase, structuring a deal, or simply trying to understand how this applies to your situation, it’s worth having that conversation upfront.

Because in this market, it’s no longer just about the property—

It’s about who’s behind the purchase.