TX Adopts Prohibitions on Certain Foreign Ownership of Real Property

Texas recently amended its law to prohibit certain companies, individuals, and government entities from designated countries from purchasing or acquiring interest in real property in Texas.  The designated countries, defined as countries identified in at least one of the last three United States Director of National Intelligence Annual Threat Assessments and may include a country designated by the Governor under the designation process detailed in the law, currently include: China, Russia, Iran, and North Korea.

The law provides that if a purchase of or acquisition of interest in real property is found by a district court to be in violation of this law, it will, among other things, be ordered divested.  Any sale or disposition proceeds related to the court order will be paid first to existing liens, then to the reasonable costs incurred by Texas in enforcement, and the remainder to the violator.  The purchase or acquisition of an interest in real property, except for acquisition of a leasehold interest, in violation of this law is not void because of the violation, and the purchase contract or interest conveyance remains valid and enforceable.

Under the law, it is a felony if certain individuals with connections to designated countries, as detailed in the law, knowingly or intentionally violate this law.  A company or entity found to violate the law is liable for a civil penalty of the greater of $250,000 or fifty percent of the market value of the subject property.

This law is effective on September 1, 2025.

As additional background, the Trump administration recently announced that it plans to take steps, including by working with Congress and various states, to more broadly block certain foreign nationals (e.g., China) from purchasing certain types of land (e.g., agricultural land).