Texas SB 17: Foreign Ownership of Texas Real Property and What It Means for Businesses

In 2025, Texas enacted Senate Bill 17, a law designed to limit foreign ownership of Texas real property by entities and individuals tied to certain countries. If you are buying property in Texas, starting a business that involves real estate, or expanding an existing operation, you need to understand how SB 17 affects you. This guide explains the law, who it applies to, and what steps you should take before purchasing property.

What Is Texas SB 17?

Senate Bill 17 took effect on September 1, 2025. The law generally prohibits entities and individuals with ties to designated foreign-adversary countries from acquiring or holding interests in Texas real property. The law is enforced by the Texas Attorney General.

The goal is to protect Texas agricultural land, infrastructure, and economic interests from acquisition by foreign entities tied to countries deemed adversarial to the United States. The law applies not just to direct purchases but also to acquiring any interest in Texas real property, including partnerships, joint ventures, and other ownership structures.

Who Does SB 17 Affect?

SB 17 applies to:

• Foreign nationals and entities from designated adversary countries attempting to acquire Texas real property
• U.S. entities in which a designated foreign adversary has control or a significant ownership interest
• Individuals living in the United States who are nationals of designated adversary countries

However, if you are a U.S. citizen or a resident alien with a green card, you are generally exempt from the restrictions, even if you have ties to a designated country. The key factor is your citizenship and immigration status in the United States.

For small business owners, the restriction matters only if the buyer or an owner of the business is tied to a designated country. If all owners are U.S. citizens or residents, and the business itself is a domestic entity, SB 17 likely does not restrict your property purchase. You should confirm this with a Texas real estate attorney before closing any transaction.

Which Countries Are Designated Foreign Adversaries?

Under SB 17, the designated foreign-adversary countries are:

• China
• Iran
• North Korea
• Russia

These designations are based on federal foreign policy and national security concerns. The list can be updated, so it is important to check the Texas Attorney General's website for any changes.

What Properties Are Covered by SB 17?

The law applies broadly to "Texas real property," which includes land and any structures or improvements on the land. This encompasses:

• Agricultural land
• Commercial real estate
• Industrial property
• Residential property
• Any other real property located in Texas

SB 17 also covers interests in property held indirectly through partnerships, limited liability companies, corporations, trusts, and other entities. If a designated foreign adversary controls or has significant influence over an entity that owns Texas real property, that interest is covered by the law.

The Attorney General's Implementing Rules (Chapter 67)

The Texas Attorney General published proposed Chapter 67 implementing rules on March 27, 2026. These rules provide greater detail on how SB 17 will be enforced and define key terms such as "control," "significant interest," and "acquisition."

The implementing rules also establish reporting duties for certain professionals involved in real estate transactions, including lenders, title companies, insurers, brokers, and appraisers.

As of October 2026, there is conflicting information about whether the proposed rules are final or still pending adoption. Some law firm sources indicate the rules became effective on April 26, 2026, while others cite a September 27, 2026 deadline for the Attorney General to adopt or withdraw the proposed rules. To obtain the most current rule text and effective date, check the Texas Register and the Texas Attorney General's website at https://www.texasattorneygeneral.gov/.

Reporting Duties for Lenders, Title Companies, and Other Professionals

The proposed Chapter 67 rules establish reporting and verification duties for professionals involved in real estate transactions. These duties apply to:

• Lenders: Under the proposed rules, banks and mortgage lenders may need to ask about the citizenship or ownership ties of loan applicants and property buyers. Confirm the final requirements with your lender.
• Title companies: Under the proposed rules, title companies may need to confirm that the buyer and any significant owners are not tied to designated adversary countries. Confirm the final requirements with your title company.
• Real estate brokers: Under the proposed rules, brokers may need to make inquiries about whether buyers or sellers are subject to SB 17 restrictions.
• Appraisers: Appraisers may be required to provide information or certifications regarding the foreign-ownership status of a property or buyer.
• Insurance companies: Property and casualty insurers may need to verify SB 17 compliance before issuing policies.

In practice, this means that any real estate transaction involving a foreign national or an entity with foreign ownership will trigger additional due diligence and documentation requirements. Do not be surprised if lenders and title companies request copies of passports, citizenship documents, or ownership structure documentation.

Exceptions and Safe Harbors

SB 17 includes several important exceptions:

• U.S. citizens and permanent residents: Individuals who are U.S. citizens or hold a green card can own Texas real property without restriction under SB 17, regardless of their national origin or family ties.
• Domestic entities with U.S. ownership: Corporations, LLCs, partnerships, and trusts owned entirely by U.S. citizens and residents are not subject to SB 17 restrictions.
• Certain property types: The law may exclude certain categories of property or transactions; consult the Attorney General's rules for specific details.

The law does not restrict U.S.-owned entities from doing business with foreign companies or from entering into normal commercial relationships. The restriction applies only to acquisition and ownership of the property itself.

What Small Business Owners Need to Know

If you are starting or expanding a business in Texas that involves owning real property, SB 17 is relevant only if you or any co-owner is a national of China, Iran, North Korea, or Russia, or if your business entity is controlled by an entity or individual tied to one of these countries.

If all owners are U.S. citizens or green card holders, and your business is formed as a domestic entity (such as a Texas LLC or Texas corporation), SB 17 generally does not restrict your ability to purchase property. However, the status of the proposed rules is unclear (see above), and interpretation may evolve. Circumstances involving complex ownership structures, foreign investors, or mixed citizenship can quickly become complicated.

It is advisable to discuss your specific situation with a Texas real estate attorney before closing any substantial property purchase or forming an entity that will hold real property.

Steps to Take Before Purchasing Texas Real Property

If you are considering purchasing or acquiring an interest in Texas real property, follow these steps:

1. Identify all owners and decision-makers: List all individuals and entities with an ownership stake or control over the buyer. Determine the citizenship and national origin of each.
2. Consult a Texas real estate attorney: Before making an offer or beginning negotiations, discuss SB 17 with an attorney licensed in Texas. They can review your ownership structure and advise you on compliance requirements.
3. Disclose relevant information early: If you or any owner is a foreign national, disclose this to lenders, title companies, and brokers early in the process. Do not wait until closing.
4. Obtain written compliance confirmation: Ask your attorney to provide a written opinion or certification that the transaction complies with SB 17, if your situation involves foreign nationals or entities.
5. Keep documentation: Maintain records of citizenship, immigration status, and business ownership percentages. These may be requested by lenders or title companies during due diligence.

Where to Find the Most Current Information

SB 17 is an evolving area of Texas law. Sources conflict on whether the Attorney General's implementing rules are final. To stay informed and ensure full compliance:

• Visit the Texas Attorney General's website: https://www.texasattorneygeneral.gov/
• Check the Texas Register for updates on Chapter 67 and any final rules: https://www.sos.state.tx.us/texreg/index.shtml
• Consult with a Texas real estate attorney who has experience with SB 17 compliance.

Important Disclaimer

This guide is informational only and does not constitute legal advice or tax advice. SB 17 is complex, and the law's application depends heavily on individual facts and circumstances. The status of the Attorney General's implementing rules is unclear, and interpretation may change as the rules are adopted or clarified.

Before purchasing Texas real property, acquiring a business with real estate interests, or structuring any transaction that involves foreign nationals or foreign entities, consult a qualified Texas real estate attorney. If tax implications are a concern, also consult a CPA or tax professional. An attorney can review your specific situation, examine the transaction documents, and help ensure full compliance with SB 17 and all other applicable laws.