SB17

What SB17 restricts

SB17 bars specified foreign governments, businesses and individuals from acquiring interests in Texas real property. It is not a ban on every foreign citizen buying a home, and it reaches much more than farmland: homes, commercial and industrial property, groundwater, water rights, minerals, mines and standing timber are included. Signed June 20, 2025, it took effect September 1, 2025 and applies to acquisitions on or after that date; earlier acquisitions remain governed by prior law. official history; final law, Sections 4, 6 and 8.

A “designated country” is one identified as a national-security risk in at least one of the three most recent U.S. intelligence community annual threat assessments, or one designated by the governor. The definition is not a permanently fixed four-country list. The act’s findings discuss China, Russia, Iran and North Korea, drawing on the 2025 threat assessment; those findings state the legislature’s security rationale, not a finding that every person from those countries poses a threat. final law, Sections 1 and 5.251.

Who is covered—and the exceptions

U.S. citizens and lawful permanent residents are exempt. A company or organization is exempt if it is owned or controlled by qualifying citizens or permanent residents and by no prohibited individual described in Section 5.253. Leasehold interests in land or leasehold improvements lasting less than one year are exempt—not leases of exactly one year. final law, Section 5.252.

Subject to those exceptions, the prohibition covers a designated country’s government; a company or organization headquartered there, held or controlled directly or indirectly by its government, owned by or majority-held/controlled by covered individuals, or designated by the governor; and companies or organizations owned by or majority-held/controlled by those covered companies or organizations. Ownership and control matter, not just a business’s mailing address. final law, Section 5.253(1)–(3).

Covered individuals include: people domiciled in a designated country; citizens of a designated country domiciled outside the U.S. in a different, nondesignated country where they have not completed naturalization; citizens of a designated country unlawfully present in the U.S.; non-U.S. citizens acting as agents or on behalf of a designated country; and members of its ruling political party or a subdivision of that party. “Domiciled” means a true, fixed, permanent home and principal residence to which the person intends to return when absent—not citizenship or visa status alone. final law, Sections 5.251(4) and 5.253(4).

The domicile provision contains a narrow home exception: someone lawfully present and residing in the U.S. at acquisition may acquire residential property intended as a residence homestead under Tax Code 11.13(j). That proviso is within Section 5.253(4)(A); it is not a blanket exemption overriding the other prohibited categories. The governor may add or remove country or entity designations after the specified public-safety and Homeland Security Council consultations; changes apply to acquisitions from the designation or removal date forward. final law, Sections 5.253–.254.

Investigation and penalties

The attorney general must establish examination procedures, investigate when warranted and determine whether a violation occurred. The attorney general may then sue against the property in a district court where it lies, record notice in county property records and refer the matter to law enforcement. Investigative powers include document demands, written answers and testimony; the secretary of state must assist with ownership/control records and questions when requested. final law, Sections 5.255–.256.

After a court finds a prohibited acquisition, it must order divestiture and appoint a receiver to manage and dispose of the interest, including sale or termination of a leasehold, and refer appropriate offenses for prosecution. Sale proceeds first pay existing liens, then reasonable state enforcement costs; the remainder goes back to the acquiring owner. Except for leasehold acquisitions, a prohibited acquisition does not automatically void the transaction or purchase contract. final law, Sections 5.255(e) and 5.257.

A covered individual who knowingly or intentionally acquires a prohibited interest commits a state-jail felony. A company or entity found in violation faces a civil penalty equal to the greater of $250,000 or 50% of the interest’s market value. The act directs rulemaking and contains broad severability language, including a fallback prohibition on non-U.S. citizens domiciled in designated countries if the individual prohibition is invalidated. That is a legislative instruction, not a guarantee of what a court will uphold. final law, Sections 5.258–.259 and act Sections 5 and 7.