Texas takes a bold stand against foreign adversaries by banning real estate purchases from China, Russia, Iran, and North Korea in a sweeping new law that aims to protect national security but raises concerns about potential discrimination.
Key Takeaways
- Texas Senate Bill 17 prohibits individuals and entities from China, Russia, Iran, and North Korea from purchasing land and property in the state, effective September 1, 2025.
- The ban covers agricultural, commercial, industrial, residential properties, and land for mining or water use, with exemptions for U.S. citizens, legal residents, and short-term leases.
- Violations are considered felonies, with the Texas Attorney General empowered to investigate and enforce divestiture, fines, and voided leases.
- Twenty-five states have enacted similar restrictions, reflecting growing national security concerns about foreign ownership near military bases and critical infrastructure.
- Critics argue the law creates an “overly broad net” that could lead to racial profiling of innocent foreign nationals.
Texas Joins National Movement to Restrict Foreign Adversary Land Ownership
Texas has become the latest state to enact legislation restricting real estate purchases by foreign entities deemed adversarial to American interests. Senate Bill 17, signed into law by Governor Greg Abbott, specifically targets individuals and entities from China, Russia, Iran, and North Korea. The comprehensive ban covers a wide range of “real property” including agricultural land, commercial buildings, industrial facilities, residential properties, and land used for mining or water resources. The legislation, which takes effect September 1, 2025, represents a significant shift in Texas’s approach to foreign investment and ownership.
The new law is part of a growing national trend, with twenty-five states having already passed similar restrictions on foreign property ownership. Additional states and federal legislation are currently under consideration as concerns about national security risks associated with foreign land ownership continue to mount. Texas previously had no state-level restrictions on foreign ownership of land or businesses, with the exception of the Lone Star Infrastructure Protection Act, making this new legislation a substantial policy change for the state known for its business-friendly environment.
“Chinese companies purchasing American land, particularly near sensitive strategic and military sites, is not a coincidence. The CCP is blatantly attempting to base espionage efforts, and potentially worse, right in our backyard, and it’s up to states to act accordingly,” said Michael Lucci, from the State Financial Officers Foundation.
Exemptions and Enforcement Mechanisms
Senate Bill 17 includes several important exemptions to avoid impacting legitimate residents. U.S. citizens, lawful permanent residents, and individuals legally residing in the United States who are purchasing a primary residence are not affected by the ban. Additionally, the legislation exempts leaseholders with terms of less than one year. However, the law creates uncertainty for current leaseholders from restricted countries, as it remains unclear whether lease renewals will be exempt from the prohibition or treated as new transactions subject to the ban.
The Texas Attorney General’s office has been empowered to investigate suspected violations of the new law. Violations are considered felonies, potentially resulting in severe consequences including forced divestiture, substantial fines, and voided leases. This enforcement mechanism gives the law significant teeth, though questions remain about how aggressively the state will pursue violations and what resources will be dedicated to enforcement efforts. The non-retroactive nature of the law means existing property owners from the designated countries can maintain their current holdings.
Controversy and Criticism
While supporters frame the legislation as a necessary national security measure, the law has faced substantial criticism from various quarters. Civil rights organizations have expressed concerns about the potential for discrimination and racial profiling. The broad scope of the ban, which applies to all individuals from the designated countries regardless of their personal circumstances or intentions, has been particularly controversial. Critics argue that the legislation may unfairly impact innocent foreign nationals who have legitimate reasons for property ownership in Texas.
Asian Americans Advancing Justice expressed being “outraged” by the law, stating that it “creates an overly broad net that places innocent foreign nationals at risk of racial profiling.”
The legislation may also create complications for U.S. investment funds and Real Estate Investment Trusts (REITs) that have passive economic minority owners from the designated countries. This could force significant restructuring for some business entities operating in Texas, potentially disrupting investment flows and creating compliance challenges for businesses with complex ownership structures. Some business interests have expressed concern that the law could dampen foreign investment in Texas more broadly, even from countries not specifically targeted by the legislation.
Broader National Security Context
Senate Bill 17 emerges from a context of heightened concerns about foreign adversaries acquiring strategic assets within the United States. Proponents cite specific instances of Chinese entities purchasing land near U.S. military bases and other critical infrastructure, suggesting these acquisitions may be strategically motivated rather than purely economic. The legislation follows incidents such as the arrest of Chinese nationals attempting to smuggle biological pathogens into the United States, which have heightened concerns about espionage and national security threats.
At the federal level, lawmakers are considering legislation to increase oversight of foreign farmland purchases, proposing to involve the U.S. Agriculture Secretary in the Committee on Foreign Investment in the United States (CFIUS). Texas had also proposed creating its own Texas Committee on Foreign Investment (TCFI) modeled after the federal CFIUS, though this component did not pass in the current legislative session. These efforts reflect a growing awareness of potential vulnerabilities in the U.S. system for reviewing foreign investments for national security implications.
