Texas has enacted one of the most comprehensive foreign land ownership restrictions in the United States, with Senate Bill 17 barring people tied to China, Iran, North Korea, or Russia from buying most Texas real estate, including farmland, homes and commercial property, effective September 1, 2025. This sweeping legislation represents a significant shift in state policy that reflects growing national security concerns while generating substantial debate about discrimination and constitutional rights.
The Legislative Journey
The path to this restrictive law began with concerns about foreign influence and national security threats. Sen. Lois Kolkhorst filed a bill that would ban citizens, governments and entities from China, Iran, North Korea and Russia from purchasing land in the state, part of what she and other Republicans have said will help stem foreign influence in Texas.
The legislation, Senate Bill 17, already cleared the Texas Senate with support from all Republicans and four Democrats, mostly representing border districts. However, the legislative process involved significant amendments and modifications that expanded the scope and enforcement powers of the original proposal.
A crucial development occurred during House consideration when a last-minute change would let the governor add more countries to the ban. This amendment significantly expanded executive power over land ownership restrictions beyond the originally designated countries.
Scope and Coverage of the Restrictions
The Texas law is notable for its broad application across property types. The ban would apply broadly to all “real property” in the state, including agricultural, commercial and residential property, a change from previous drafts that prohibited only certain land near critical infrastructure facilities.
The bill prohibits citizens of China, Iran, North Korea and Russia from buying real estate in the state—and would give the governor broad power to add any other nation he wants to that list. This comprehensive approach distinguishes Texas from other states that have focused primarily on agricultural land or properties near sensitive facilities.
The legislation targets not just individual citizens but also extends to business entities and government organizations. Companies, government organizations and citizens from those countries would no longer be able to purchase any property in Texas, creating a comprehensive barrier to property acquisition by covered entities.
Targeting National Security Threats
The law’s foundation rests on national security designations made at the federal level. After the House amended SB 17, real estate sales restrictions were limited to countries that the United States National Director of Intelligence designated as national security threats. Currently, that list includes China, Iran, North Korea, and Russia.
This approach aligns Texas policy with federal intelligence assessments while providing flexibility for future additions. Those nations currently include just China, Iran, North Korea and Russia, but the governor’s authority to expand the list means additional countries could face restrictions based on changing geopolitical circumstances.
The national security rationale reflects broader concerns about foreign influence and potential threats to critical infrastructure, agricultural resources, and strategic locations within Texas.
Implementation and Enforcement Mechanisms
Texas has established robust enforcement mechanisms to ensure compliance with the new restrictions. The Texas attorney general (AG) is authorized to investigate violations and refer cases to local, state, or federal law enforcement agencies for further action.
The enforcement approach includes both proactive investigation powers and reactive complaint mechanisms. It would empower the Texas attorney general’s office to investigate potential violations and take appropriate legal action against violators.
Criminal penalties await those who violate the restrictions. An individual who intentionally or knowingly acquires real property in violation of the law faces potential prosecution, creating serious consequences for non-compliance.
Limited Exceptions and Nuanced Applications
While comprehensive, the Texas law includes some exceptions for legal residents. The bill requires that the person have permission to live in the U.S. legally, but also that the property would serve as a primary residence. Those in the United States on work or student visas are also barred from buying a controlling interest in land as a business investment.
This distinction between residential and investment purposes reflects lawmakers’ attempt to balance security concerns with practical considerations for legal residents who need housing. However, the restrictions on visa holders for investment purposes remain substantial.
The primary residence exception provides some relief for legal immigrants and temporary residents, though it limits their real estate investment opportunities significantly compared to U.S. citizens and permanent residents.
Legal and Constitutional Challenges
The Texas law faces potential legal challenges based on constitutional grounds and federal precedent. Senate Bill 17 passed despite a federal court ruling that a similar law in Florida was likely beyond the state’s authority, suggesting that legal challenges may be forthcoming.
Constitutional concerns center on due process, equal protection, and potential conflicts with federal immigration and foreign policy authority. Critics argue that such broad restrictions based on national origin may violate constitutional protections and exceed state authority over foreign relations.
The Florida court ruling mentioned in the coverage suggests that federal courts may view state-level foreign ownership restrictions skeptically, particularly when they appear to conflict with federal authority over immigration and foreign policy.
Political Support and Opposition
The legislation enjoys strong Republican support while facing criticism from civil rights advocates and some Democratic lawmakers. Supporters say the new law will make the state more secure, but critics say it’s discriminatory, reflecting the partisan and ideological divide surrounding the issue.
Republican supporters frame the restrictions as necessary security measures that protect Texas resources and prevent potentially hostile foreign influence. They argue that the law addresses legitimate national security concerns identified by federal intelligence agencies.
Critics contend that the law amounts to discriminatory targeting based on national origin and may violate civil rights protections. They argue that such broad restrictions could harm legitimate residents and business relationships while potentially violating constitutional principles.
Federal Context and National Trends
Texas’s action occurs within a broader national trend toward restricting foreign land ownership. In July 2025, the Administration took executive action to launch the National Farm Security Action Plan, which includes a key initiative to collaborate with state and federal partners on legislative and executive measures aimed at ending the direct or indirect purchase or control of U.S. farmland by foreign entities of concern.
This federal initiative suggests coordination between state and federal efforts to address foreign land ownership concerns. The alignment between Texas policy and federal priorities may provide political and legal support for the state’s approach.
Multiple states have considered or enacted similar restrictions, though Texas’s law is among the most comprehensive in scope and enforcement mechanisms.
Economic and Market Implications
The restrictions will likely affect Texas real estate markets, particularly in areas with significant foreign investment activity. Chinese nationals have been active in U.S. real estate markets, and their exclusion from Texas could redirect investment to other states or reduce overall foreign investment in Texas Real Estate.
Real estate professionals will need to implement compliance procedures to verify buyer eligibility and avoid facilitating prohibited transactions. Title companies and lenders will require new processes to ensure compliance with the restrictions.
The law may also affect property values in markets that previously attracted significant foreign investment, though the overall impact will depend on the scale of affected transactions and market responses.
Implementation Timeline and Practical Effects
Starting Sept. 1, 2025, the new restrictions took effect, creating immediate compliance requirements for real estate transactions. This implementation timeline provided some advance notice for affected parties while establishing a clear enforcement date.
Real estate professionals, legal practitioners, and financial institutions needed to develop new procedures and training to comply with the restrictions. The broad scope of covered properties means virtually all real estate transactions in Texas now require nationality and entity verification.
The practical effects extend beyond individual transactions to affect investment strategies, development projects, and ongoing business relationships involving covered entities.
Looking Forward: Implications and Uncertainties
Texas’s comprehensive approach to restricting foreign land ownership sets a precedent that other states may follow while raising questions about legal sustainability and practical effectiveness. The law’s ultimate impact will depend on enforcement actions, legal challenges, and market adaptations.
The governor’s authority to add additional countries to the restricted list creates uncertainty about future expansions and the criteria for such decisions. This flexibility allows for response to changing geopolitical conditions but also creates unpredictability for affected parties.
As other states consider similar measures and federal policy evolves, Texas’s experience with Senate Bill 17 will likely influence national approaches to foreign land ownership restrictions. The balance between security concerns and constitutional rights will continue to shape policy debates and legal challenges.
Texas real estate restriction on Chinese nationals and other designated foreign entities from buying land represents one of the most comprehensive state-level approaches to foreign real estate ownership in the United States. While supporters view it as necessary for national security, critics raise concerns about discrimination and constitutional overreach.
The law’s broad scope, robust enforcement mechanisms, and potential for expansion make it a significant development in state policy toward foreign investment. As implementation proceeds and legal challenges develop, Texas’s approach will serve as a crucial test case for the balance between security concerns and constitutional rights in real estate policy.
