Foreigners can buy property in Texas, and state law gives them the same ownership rights as U.S. citizens under Texas Property Code Section 5.005.1State of Texas. Texas Property Code Section 5.005 – Aliens One large exception took effect on September 1, 2025: individuals and entities connected to China, Iran, North Korea, and Russia are now barred from acquiring most real property in the state. Everyone else can buy freely, though federal tax rules, identification requirements, and a handful of regulatory checkpoints apply that domestic buyers never encounter.
The General Rule
Section 5.005 says an alien has the same real and personal property rights as a United States citizen.1State of Texas. Texas Property Code Section 5.005 – Aliens That single sentence lets a foreign national buy, own, and sell a house, ranch, commercial building, or vacant lot anywhere in Texas. No visa is required to hold title. Owning property does not create any immigration benefit, so a Texas deed does not lead to a green card or work authorization. An investor in London or São Paulo can own a home in Austin without ever setting foot in Texas.
Who Is Now Restricted: Senate Bill 17
The 2025 amendment to Section 5.005 added the words “Except as provided by Subchapter H.” Subchapter H, created by Senate Bill 17, prohibits people and entities connected to four countries from acquiring an interest in Texas real property.2Texas Legislature. 89th Legislature SB 17 – Enrolled Version The designated countries are China, Iran, North Korea, and Russia.
The ban is broader than it may first appear. It reaches:
- Citizens of a designated country, people domiciled there, and members of a ruling political party of that country.
- Any governmental body of a designated country.
- Entities headquartered in, controlled by, or majority-owned by individuals or governments of a designated country.
The prohibition applies to farmland, homes, and commercial property alike.
The Homestead Exception
There is one narrow carve-out. An individual who is lawfully present and residing in the United States may acquire a single residential property intended for use as a homestead.2Texas Legislature. 89th Legislature SB 17 – Enrolled Version A Chinese citizen on a work or student visa living in Texas, for example, can buy one home to live in. Additional investment properties and second homes are off the table.
What Happens If You Violate the Ban
A purchase made in violation of SB 17 is not automatically void, but the consequences are serious. A court can order divestiture and appoint a receiver to sell the property. Sale proceeds first pay any existing liens, then the state’s enforcement costs, and any remainder goes back to the buyer.2Texas Legislature. 89th Legislature SB 17 – Enrolled Version
An individual who intentionally buys property in violation of the law commits a state jail felony, punishable by up to two years in a state jail facility and a fine of up to $10,000. For companies and other entities, the attorney general can pursue a civil penalty equal to the greater of $250,000 or 50 percent of the property’s market value.2Texas Legislature. 89th Legislature SB 17 – Enrolled Version
Federal Review Near Military Installations
Buyers from countries not on the Texas list can still face federal scrutiny if a property sits near a military base. The Committee on Foreign Investment in the United States (CFIUS) has jurisdiction over real estate transactions near listed military installations. The distance trigger varies by site: as close as one mile from some installations, and up to 100 miles from others.3Federal Register. Definition of Military Installation and the List of Military Installations in the Regulations Texas hosts dozens of major military facilities, so this comes up more often than buyers expect.
Parties can file a voluntary declaration or notice through the CFIUS Case Management System. CFIUS has 30 days to assess a declaration and 45 days to review a formal notice.4U.S. Department of the Treasury. CFIUS Real Estate Instructions Part 802 Not every purchase near a base requires a filing, but ignoring CFIUS when it applies can result in the transaction being unwound. Any purchase within 100 miles of a military installation deserves a look from a real estate attorney familiar with the rules.
Identification and Taxpayer ID
Every foreign buyer needs two things before a Texas title company will process the deal: proof of identity and a U.S. taxpayer identification number.
A valid foreign passport is the standard form of identification. No visa is needed to own the property, but a buyer who travels to Texas for inspections or closing needs a valid visa for entry. Title companies and county clerks require the buyer’s name on all documents to match the passport exactly, down to spelling and the order of names. Small mismatches can delay recording or create title defects that surface years later.
Buyers without a Social Security Number must obtain an Individual Taxpayer Identification Number (ITIN) by filing IRS Form W-7.5Internal Revenue Service. About Form W-7, Application for IRS Individual Taxpayer Identification Number The ITIN is a nine-digit number the IRS issues for federal tax purposes to people who need a taxpayer ID but are not eligible for an SSN. The application requires a certified copy of the applicant’s passport or other identification documents.6Internal Revenue Service. Form W-7 (Rev. December 2024) Application for IRS Individual Taxpayer Identification Number Processing can take several weeks, so start early.
Paying for the Property
Most foreign buyers pay cash, but financing is available. Either way, the practical first step is opening a U.S. bank account. Title companies require funds to arrive in a domestic escrow account, and wiring money internationally into a U.S. account triggers compliance checks that can take days. Setting up the account in advance keeps the closing on track.
Sellers and title companies will ask for proof of funds, usually a recent bank statement or a letter from a financial institution confirming liquid capital sufficient to close. Verify wiring instructions by phone with the title company rather than relying on email alone. Wire fraud in real estate closings is common, and small errors in routing or account numbers cause delays on their own.
Some lenders offer mortgages to foreign nationals using an ITIN in place of an SSN. These loans generally carry higher interest rates and larger down payment requirements than conventional mortgages. Lenders typically ask for two years of tax returns filed with the ITIN, proof of income, and a down payment of 25 percent or more. Terms vary widely between lenders.
FIRPTA: The Withholding You Face When You Sell
The Foreign Investment in Real Property Tax Act (FIRPTA) does not block a purchase, but every foreign buyer should understand it before signing. When a foreign owner later sells U.S. real property, the buyer must withhold 15 percent of the total sale price and remit it to the IRS using Form 8288.7Internal Revenue Service. FIRPTA Withholding This is not a tax on top of any gain. It is a prepayment of the seller’s income tax obligation. If the actual tax owed comes in lower, the seller files a return to claim a refund.
One exception matters for many residential buyers: if the purchaser at that future sale intends to use the property as a personal residence and pays $300,000 or less, no withholding is required. The buyer must plan to occupy the property at least 50 percent of the days it is used during each of the first two years after purchase.8Internal Revenue Service. Exceptions from FIRPTA Withholding Other exceptions exist, including withholding certificates from the IRS that reduce or eliminate the amount.
Plan for the 15 percent cash flow hit at sale, and work with a tax professional to file for a refund if too much was withheld.
Buying Farmland, Ranchland, or Timberland
Foreign buyers who acquire agricultural land face a separate federal reporting obligation under the Agricultural Foreign Investment Disclosure Act (AFIDA). Any foreign person who acquires or transfers an interest in agricultural land must file Form FSA-153 with the local Farm Service Agency county office within 90 days of the transaction.9Office of the Law Revision Counsel. 7 USC 3501 – Reporting Requirements
Agricultural land under AFIDA covers land used for farming, ranching, or timber production, and land put to those uses within the past five years, even if it is currently idle. Land of ten acres or less is exempt if annual gross receipts from agricultural products stay under $1,000.10eCFR. 7 CFR Part 781 – Disclosure of Foreign Investment in Agricultural Land Texas has an enormous amount of qualifying land, so this catches more transactions than buyers expect.
Missing the 90-day deadline or filing an inaccurate report can produce a civil penalty of up to 25 percent of the property’s fair market value.11U.S. Department of Agriculture. Instructions for Completing Form FSA-153 On a $2 million ranch, that is a $500,000 fine for a form that takes an afternoon to complete. Buyers who handle a ranch purchase remotely without local counsel are the ones who tend to miss it.
Ongoing Property Taxes
Texas has no state income tax, and property taxes are comparatively high. Effective rates across Texas counties generally range from roughly 0.4 percent to over 2 percent of assessed value, depending on the county and the taxing districts that overlay the property. A home assessed at $400,000 could carry an annual property tax bill anywhere from $1,600 to $8,000 or more.
A foreign national who lives in the Texas property as a principal residence can qualify for the general residence homestead exemption, which reduces the taxable value of the home. Residency is the eligibility requirement; citizenship is not listed.12Texas Comptroller of Public Accounts. Property Tax Exemptions The application goes to the local appraisal district. An owner who is not physically in Texas can authorize a representative to handle protests of the assessed value.13Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
The Estate Tax Trap Non-Residents Miss
This is the most overlooked risk in foreign real estate investment. A U.S. citizen or permanent resident who dies in 2026 can pass up to $15,000,000 in assets before federal estate tax applies.14Internal Revenue Service. What’s New – Estate and Gift Tax A non-resident alien gets a unified credit of just $13,000, which shelters only about $60,000 in U.S.-situated assets.15Office of the Law Revision Counsel. 26 USC 2102 – Credits Against Tax Anything above that threshold is taxed at rates up to 40 percent. If a non-resident alien owns a $500,000 Texas home and dies, the estate could owe roughly $176,000 in federal estate tax.
An estate tax return (Form 706-NA) must be filed when the fair market value of U.S.-situated assets exceeds $60,000 at death.16Internal Revenue Service. Some Nonresidents With U.S. Assets Must File Estate Tax Returns Citizens of countries with a U.S. estate tax treaty can receive a proportional share of the higher U.S. exemption. Treaty countries include Australia, the United Kingdom, Germany, France, and Japan, among others. Citizens of countries without a treaty, including most of Latin America and much of Asia, get only the $60,000 threshold.
Many foreign buyers address the exposure by holding property through an entity structure rather than in their individual name. That planning should happen before the purchase, and it calls for a tax advisor who understands both U.S. and international tax law.
Closing the Deal Remotely
A Texas closing involves signing the warranty deed, settlement statement, and various disclosure forms. Foreign buyers who cannot travel have two workable options. Texas law permits remote online notarization, where a licensed notary verifies identity and witnesses the signing over a secure video connection, and the signer need not be physically located in Texas.17State of Texas. Texas Government Code Section 406.110 – Online Notarization Procedures Generally The alternative is signing with a wet-ink signature at a U.S. embassy or consulate.
After signing, the title company sends the deed to the county clerk for recording. Filing fees vary by county. Once recorded, the deed becomes public record establishing the new owner’s title.
Title insurance is a required line item at closing, and Texas is unusual in that the Commissioner of Insurance sets the rates every title company must charge. Shopping for a cheaper basic premium is not possible.18Texas Department of Insurance. Official Order – Title Insurance Basic Premium Rates Hearing No. 2025-9697 The premium scales with the property’s value and is paid once, at closing.