Under Texas Senate Bill 17, which took effect September 1, 2025, Chinese citizens generally cannot buy land in Texas if they are domiciled in China, but Chinese nationals lawfully present in the United States may still purchase a single home to use as their primary residence, and U.S. citizens and lawful permanent residents of Chinese descent are not restricted at all.1Houston Public Media. New Texas Law Will Ban Certain Foreign Nationals From Buying Land Whether the law applies to a specific buyer turns on citizenship, immigration status, and where the buyer actually lives.
Who the Ban Actually Covers
SB 17 restricts purchases by people and entities tied to countries the U.S. Director of National Intelligence has flagged as national security threats in each of the three most recent Annual Threat Assessments. As of the law’s passage, those countries are China, Russia, Iran, and North Korea.2Texas Attorney General. Attorney General Ken Paxton Proposes Rules to Stop Designated Foreign Adversaries Including China
On the individual side, the ban reaches people domiciled in China, people who hold sole Chinese citizenship, agents of the Chinese government, and members of the Chinese Communist Party. It also reaches Chinese government entities, organizations headquartered in or controlled by the Chinese government, and companies whose ownership traces back to any of those parties.3Texas Legislature. SB 17 Committee Report
Domicile is the pivot. A person’s domicile is where they consider their permanent home, not simply where they hold a passport. A Chinese citizen living in Texas on a work or student visa who intends to remain in Texas is, in the view of the federal courts that have looked at SB 17 so far, domiciled in Texas rather than in China.4Houston Chronicle. Judge Rules Chinese Citizens Cannot Challenge Texas Land Ban That distinction matters both for who is covered and, as discussed below, for who can even sue over the law.
Who Is Not Restricted
U.S. citizens are fully exempt, including citizens of Chinese descent. Lawful permanent residents (green card holders) are also exempt. Entities owned or controlled exclusively by U.S. citizens or permanent residents fall outside the ban as well.3Texas Legislature. SB 17 Committee Report
Short-term leases of less than one year are exempt. Property already acquired before September 1, 2025, is also outside the law’s reach: SB 17 is prospective and does not require existing Chinese-linked owners in Texas to divest.3Texas Legislature. SB 17 Committee Report
The Primary Residence Exception
The most important carve-out for most Chinese nationals in Texas is the homestead exception. A Chinese citizen who is lawfully present in the United States, meaning on a valid visa or other authorized status, may buy one home for use as their primary residence.1Houston Public Media. New Texas Law Will Ban Certain Foreign Nationals From Buying Land
The exception is narrow. It covers one home, not multiple properties, and the buyer must actually live in it. A Chinese national on a visa cannot use the exception to buy a second home, a rental house, agricultural acreage, or a commercial building. Someone in the U.S. without lawful status does not qualify for the exception at all.
What Types of Property Are Covered
Outside the residential exception, the ban sweeps broadly. It applies to agricultural land, residential homes, commercial buildings, industrial property, water rights, minerals in place, and standing timber.3Texas Legislature. SB 17 Committee Report There is no acreage threshold and no proximity-to-military-base trigger. If the buyer is covered and the property is real estate, the transaction is prohibited unless it fits an exception.
The Attorney General’s proposed implementing rules, published in the Texas Register on March 27, 2026, also close two common workarounds. A series of short-term leases that together add up to a year or more will be treated as a single restricted interest. And a change-of-control transaction at the entity level, such as selling a majority stake in a Texas company that owns real property, counts as an acquisition subject to the ban.5Snell & Wilmer. Texas Attorney General Proposes Rules to Enforce SB 17
Penalties for Buying in Violation
An individual who knowingly buys property in violation of SB 17 faces state jail felony charges, with up to two years in jail and fines up to $10,000. Organizations face civil penalties of up to $250,000 or half the market value of the property, whichever is greater.1Houston Public Media. New Texas Law Will Ban Certain Foreign Nationals From Buying Land
The Texas Attorney General has exclusive authority to investigate and sue. The AG’s office can issue civil investigative demands for documents and testimony. If a court finds the property was unlawfully acquired, it must appoint a receiver to manage and sell it. Proceeds pay off existing liens first, then reimburse the state’s enforcement costs, with any remainder returned to the buyer.6Texas Legislature. SB 17 Bill Analysis
One technical point matters for anyone wondering about a deal already in progress: a purchase made in violation of SB 17 is not automatically void. The transaction remains legally valid until the state actually takes enforcement action.6Texas Legislature. SB 17 Bill Analysis That does not make the purchase safe. It means the property sits under a cloud until the AG either acts or does not.
What Real Estate Professionals Now Have To Do
The Attorney General’s proposed rules put reporting duties on mortgage lenders, title insurance companies, property insurers, appraisers, and licensed real estate professionals, which the office labels “facilitating entities.”2Texas Attorney General. Attorney General Ken Paxton Proposes Rules to Stop Designated Foreign Adversaries Including China
These professionals have an affirmative duty to report any transaction they know or should have known violates SB 17. The standard is negligence-based, so firms are expected to run enhanced due diligence on beneficial ownership, including identifying any person or entity with a ten percent or greater voting interest. Failure to report can lead to referral to a professional licensing or disciplinary authority.5Snell & Wilmer. Texas Attorney General Proposes Rules to Enforce SB 17
For a Chinese buyer, this shows up practically. Agents, title companies, and lenders will ask more questions about citizenship, immigration status, and, for corporate buyers, who ultimately owns the entity. Some firms may decline to proceed with a transaction they view as risky, even one that would legally fit an exception. That concern was raised by Texas Democratic lawmaker Gene Wu, who said “the average person on the street couldn’t tell you if somebody is Chinese, Japanese, Korean or Vietnamese,” warning that sellers and real estate companies may refuse to deal with anyone who appears Asian out of caution.7The Straits Times. Sweeping Texas Law Barring Chinese Land Ownership Is Racist, Say Critics
The rules were still in a public comment period as of mid-2026, and the AG’s office is required to adopt or withdraw them by September 27, 2026. No enforcement actions under SB 17 have been publicly reported.
How the Courts Have Ruled So Far
Two Chinese citizens residing in Texas on nonimmigrant visas, Peng Wang and Qinlin Li, challenged SB 17 in federal court before it took effect. In Wang v. Paxton, they argued the law violates the Equal Protection and Due Process Clauses, the Fair Housing Act, and is preempted by federal authority over foreign investment through CFIUS.8National Agricultural Law Center. Federal Court Dismisses Challenge to Texas Newly Enacted Foreign Ownership Law
On August 18, 2025, U.S. District Judge Charles Eskridge dismissed the case without reaching the constitutional questions. The court found that because the plaintiffs live in Texas and consider it their permanent home, they are domiciled in Texas rather than in China, so SB 17 does not apply to them. Without a direct injury, they had no standing to sue.4Houston Chronicle. Judge Rules Chinese Citizens Cannot Challenge Texas Land Ban
The Fifth Circuit dismissed the appeal on December 10, 2025, upholding the standing ruling and again declining to reach the merits. SB 17 remains fully in effect.9Houston Public Media. Texas Lawsuit Over Land Sale Property Foreign Nationals China
The practical takeaway from those rulings is useful for Chinese nationals already living in Texas. The courts read the law as not covering people whose real, permanent home is in Texas, even if they hold only Chinese citizenship. Anyone relying on that reading should expect their domicile to be a live question in any transaction, and should be prepared to document it.
If You Already Owned Texas Property Before September 1, 2025
SB 17 does not require divestiture. Property acquired before the law’s effective date is not affected, and Chinese owners of pre-existing Texas real estate are not required to sell.3Texas Legislature. SB 17 Committee Report That distinguishes Texas from states like West Virginia, which enacted a retroactive ban in 2025 requiring divestiture of existing foreign-held interests by January 2026.10National Agricultural Law Center. 2025 Legislative Recap: Continued Expansion of State-Level Foreign Ownership Restrictions
Selling that pre-existing property to another restricted party would still be a new acquisition by that buyer, and the anti-evasion rules on entity-level changes of control mean an owner cannot transfer Texas real estate by selling the holding company either.5Snell & Wilmer. Texas Attorney General Proposes Rules to Enforce SB 17
The Governor Can Add Countries
One feature of SB 17 worth knowing: the Texas governor has discretionary authority to add countries or transnational criminal organizations to the restricted list, or to remove them, after consulting with the director of public safety and the Homeland Security Council.11LegiScan. Texas SB 17 Full Text The list of covered countries is not frozen at China, Russia, Iran, and North Korea, and could shift over the life of a long-term property investment.