SB 17 and Foreign Ownership in Texas: What It Means for Real Estate in 2025

Understanding SB 17: New Rules for Foreign Buyers in Texas

Starting September 1, 2025, a new Texas law—Senate Bill 17 (SB 17)—will take effect, placing restrictions on the acquisition and lease of Texas real estate by certain foreign individuals, governments, and entities.

This law may impact some transactions moving forward, and as a buyer, investor, or real estate observer in Central Texas, it’s important to understand what it does (and does not) mean for the market.

What Is SB 17?

SB 17 is a state law that restricts property ownership and long-term leases by people and organizations connected to countries the U.S. has identified as national security threats.

As of August 11, 2025, the restricted countries include:

• China
• Russia
• Iran
• North Korea

The governor of Texas may expand the list in the future.

What Types of Property Are Affected?

The restrictions apply broadly and include:

• Residential homes
• Commercial and industrial property
• Agricultural land
• Water rights, timber, and mineral interests
• Leases of one year or longer

Importantly, this only applies to transactions closing on or after September 1, 2025. Properties purchased or leased before that date are not affected.

Who Is Restricted?

SB 17 applies to:

• Foreign governments from designated countries
• Individuals acting on behalf of, or affiliated with, those governments or their ruling parties
• Entities headquartered in, or controlled by, restricted countries

However, there are exceptions. Individuals who are lawfully present in the U.S. may still purchase property for personal homestead use. U.S. citizens, lawful permanent residents, and U.S.-based businesses they own are also exempt—unless ownership or control ties back to a restricted entity.

What About Enforcement?

The Texas Attorney General will oversee enforcement. If a property is acquired in violation of the law:

• The attorney general can seek divestment or termination of the transaction in court
• Criminal charges may apply (potential state jail felony)
• Civil penalties for entities may reach $250,000 or 50% of the property’s market value, whichever is greater.

This law does not invalidate a purchase contract that’s already in motion—even if the transaction would be restricted under SB 17 

Do Real Estate Agents Have to Enforce This?

No. Real estate agents and brokers are not responsible for enforcing SB 17. However, Texas REALTORS® is monitoring the law closely and may update contracts or forms in the future to ensure clarity and compliance.

What About Fair Housing?

It’s important to note that nothing in SB 17 overrides the Fair Housing Act. REALTORS® must continue to provide equal professional service to all clients and consumers, regardless of nationality or background.

What This Means for Central Texas Buyers

For most of our clients in Austin, Buda, Kyle, and the surrounding areas, this law will not impact your ability to buy or sell real estate. However, if you’re part of a business transaction involving foreign investment, or if you’re helping family members abroad explore ownership, it’s smart to:

• Confirm immigration/residency status for homestead purchases
• Work with a real estate attorney for complex or cross-border transactions
• Stay informed as the law evolves and legal challenges unfold

At least one lawsuit has already been filed challenging the constitutionality of SB 17. Legal updates are expected in the coming months.

​Have Questions About SB 17 or Buying in Texas?​

Whether you’re a first-time buyer, an international client, or an investor navigating a changing landscape, I’m here to help you understand your options and move forward with confidence.

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Contact Brandon Holley at 512.487.9242 | brandon@holleyhomesrealty.com | Contact​

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