Buying a home or investment property in Texas from another country—or while living in the United States on a visa—raises immediate questions about ownership laws, financing, and U.S. taxes.
This 2026 guide explains the federal and Texas rules for international buyers, including how Texas Senate Bill 17 works, how to finance a purchase, and how the IRS taxes rental income and future home sales.
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You will walk away with a clear, step-by-step roadmap for purchasing Texas real estate and a breakdown of the mortgage, legal, and tax rules to review with your advisors before making an offer.
Can Foreigners Buy Property in Texas?
If you are asking whether foreigners can buy property in Texas, the answer for most international buyers is yes. Our research found no federal statute that generally bars foreign nationals from buying U.S. homes, and Texas law grants non-citizens the same property ownership rights as U.S. citizens, subject to specific state and federal exceptions.
At the federal level, regulations focus on national-security reviews and agricultural land disclosures rather than a blanket ban on buying houses. At the state level, Texas Property Code Section 5.005 gives aliens the same property rights as U.S. citizens, "Except as provided by Subchapter H"—the statute created by Texas Senate Bill 17 (SB 17), which took effect on September 1, 2025.
Whether you are relocating to Texas for work, purchasing a second home, or investing from abroad, understanding how federal rules and Texas SB 17 apply to your citizenship and residency is the first step in your home search.
Federal Rules for Foreign Real Estate Buyers: CFIUS and AFIDA
We found no federal statute that generally prohibits foreign nationals from buying homes. Instead, the two federal frameworks below review or require reporting on certain kinds of purchases. This is our reading of those rules, not an official statement, so confirm your situation with an attorney.
CFIUS Real Estate Reviews (31 CFR Part 802)
The Committee on Foreign Investment in the United States (CFIUS) has authority under 31 CFR Part 802 to review certain real estate transactions by foreign persons when the property is located near sensitive sites, such as ports and military installations.
For typical homebuyers, the regulations contain two major exceptions under 31 CFR Section 802.216:
- Single housing units: CFIUS rules specifically except covered real estate that is a single housing unit, including fixtures and adjacent land to the extent that such fixtures and land are incidental to the use of the real estate as a single housing unit (Section 802.216(d)).
- Urbanized areas: The rules also generally except real estate located within an urbanized area or urban cluster, except real estate covered by Section 802.211(a) or (b)(1) (Section 802.216(c)).
Agricultural Land Reporting Under AFIDA (7 CFR Part 781)
If your Texas purchase involves ranchland, timberland, or farmland, federal disclosure rules may apply. Under the Agricultural Foreign Investment Disclosure Act (AFIDA), regulated at 7 CFR Part 781, any foreign person who acquires or transfers an interest in U.S. agricultural land must file Form FSA-153 within 90 days after the date of acquisition or transfer.
Small tracts are excluded: land not exceeding 10 acres in the aggregate with farm, ranch, or timber receipts of no more than $1,000 a year. Late, incomplete, or false AFIDA reports carry penalties of up to 25% of the fair market value of the foreign person's interest in the land.
Texas SB 17 Foreign Ownership Rules Explained
The most important state-level law for a foreign buyer of Texas real estate to understand is Senate Bill 17 (89th Legislature, Regular Session), codified in Texas Property Code Chapter 5, Subchapter H (Sections 5.251 through 5.259). Signed by the Governor on June 20, 2025, Texas SB 17 took effect on September 1, 2025, and applies only to property acquisitions occurring on or after that date.
What Property Is Covered?
Under Section 5.251(6), real property covered by SB 17 includes:
- Residential property
- Agricultural, commercial, and industrial property
- Groundwater and water rights
- Mines, quarries, minerals in place, and standing timber
How "Designated Countries" Are Defined
The text of the statute does not list specific countries by name. Instead, Section 5.251(3) defines a "designated country" as:
- Any country identified by the U.S. Director of National Intelligence (DNI) as a country that poses a risk to the national security of the United States in at least one of the three most recent Annual Threat Assessments of the U.S. Intelligence Community; plus
- Any country designated by the Governor of Texas under Section 5.254 after consulting the Department of Public Safety and the Homeland Security Council.
While the statute itself uses that rolling definition rather than naming countries, the bill's legislative findings discuss China, Russia, Iran, and North Korea from the 2025 Annual Threat Assessment. The Office of the Attorney General (OAG) likewise stated in an October 9, 2026 press release that the law restricts purchases by those connected to "designated adversarial nations, including China, Russia, Iran, and North Korea."
Who Is Prohibited From Acquiring Texas Property Under SB 17?
Under Section 5.253, the following entities and individuals may not purchase or otherwise acquire an interest in Texas real property:
- Government entities of a designated country.
- Companies or organizations that are headquartered in a designated country, controlled by the government of a designated country, majority-owned by covered individuals of a designated country, designated by the governor, or majority-owned by those companies.
- Covered individuals, defined as individuals who are:
- Domiciled in a designated country;
- Citizens of a designated country who are domiciled outside the United States in a non-designated country where they have not completed the naturalization process;
- Citizens of a designated country who are unlawfully present in the United States;
- Foreign citizens acting on behalf of a designated country; or
- Members of the ruling political party of a designated country.
Key Exemptions and the Residence Homestead Carve-Out
Texas SB 17 includes explicit exemptions and a residence homestead exception that allow many lawful U.S. residents to buy a home in Texas:
| Category | Statutory Reference | How It Works Under Texas SB 17 |
|---|---|---|
| U.S. Citizens & Lawful Permanent Residents | Property Code Section 5.252 | U.S. citizens and lawful permanent residents (green card holders) are completely exempt from Subchapter H. |
| Companies Owned by U.S. Citizens or LPRs | Property Code Section 5.252 | Companies owned by or under the control of U.S. citizens or lawful permanent residents (and with no covered individuals) are exempt. |
| Short-Term Leaseholds | Property Code Section 5.252 | A leasehold interest of less than one year is exempt from the law. |
| Residence Homestead Carve-Out | Property Code Section 5.253(4)(A) | An individual domiciled in a designated country who is lawfully present and residing in the United States at the time of purchase may purchase or acquire residential property intended for use as the individual's residence homestead. |
Enforcement, Penalties, and Effect on Title
Under Sections 5.255 through 5.259, the Texas Attorney General investigates potential violations, may issue civil investigative demands, and may bring an in rem action against the property in the county where it is located. If a court finds a violation, it must order the property divested through a court-appointed receiver, with sale proceeds applied first to existing liens, second to the state's enforcement costs, and any remainder returned to the owner.
Penalties are severe:
- Individuals (Section 5.258): A covered individual who intentionally or knowingly acquires real property in violation of the law commits a state jail felony.
- Companies (Section 5.259): A violating company faces a civil penalty of the greater of $250,000 or 50% of the market value of the property interest.
Section 5.255(e) specifies that a purchase in violation of SB 17 is not void (except for leaseholds), and the validity of the contract or conveyance is not otherwise affected.
2026 Rulemaking and Litigation Status
Our research found no 2026 ruling striking down or blocking SB 17, and no final Attorney General rules:
- Attorney General rulemaking: On October 9, 2026, the Texas Office of the Attorney General announced proposed rules (published in the October 9, 2026 Texas Register) that would allow any person to file complaints, provide good-faith due-diligence protections for facilitating entities, and plan an online registry of covered foreign-owned property, including pre-SB 17 acquisitions. As of that October 9, 2026 release, these rules are proposed, not final.
- Court challenges: In Peng Wang v. Paxton (No. 25-20354), the U.S. Court of Appeals for the Fifth Circuit affirmed the dismissal of a challenge to SB 17 for lack of standing on December 11, 2025. The court held that a plaintiff who had lived in Texas for 16 years and intended to remain was not "domiciled in China," meaning SB 17 did not apply to him; the court did not rule on the law's constitutionality.
Important legal note: Because Texas SB 17 turns on legal concepts such as domicile, lawful presence, corporate ownership structure, and residence homestead intent—and because Attorney General rulemaking is still in progress—this guide is for educational purposes only and is not legal advice. Any buyer with potential ties to a designated country should consult a qualified Texas real estate attorney before signing a purchase contract.
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Mortgage and Financing Options for Foreign Buyers in Texas
You do not have to pay all cash to buy a house in Texas as a non-U.S. citizen. However, the Texas home loan options available to you depend on whether you live and work lawfully in the United States or reside abroad, and every loan program is subject to individual lender guidelines and Texas SB 17 compliance.
1. Conventional Loans for Lawful Permanent and Non-Permanent Residents
If you live and work in the United States lawfully—for example, as a lawful permanent resident (green card holder) or a lawfully present non-permanent resident—you may qualify for a standard conventional mortgage.
According to the Fannie Mae Selling Guide (Topic B2-2-02, Non-U.S. Citizen Borrower Eligibility Requirements), Fannie Mae purchases mortgages made to non-U.S. citizens who are lawful permanent or non-permanent residents of the United States under the same terms that are available to U.S. citizens, provided the lender warrants that the borrower is legally present in the United States. Borrowers must still meet standard credit, income, debt-to-income, and asset underwriting requirements, as well as Texas conforming loan limits.
2. FHA Loans in Texas
Some buyers who live in the United States may also want to compare FHA loans in Texas for a primary residence. This guide does not cover FHA eligibility rules for non-citizens, so confirm your eligibility and the Texas FHA loan requirements directly with a participating lender before applying.
3. Foreign National Loans (Non-QM)
Buyers who live outside the United States and are not lawfully present as U.S. residents are not covered by Fannie Mae's non-citizen eligibility rules. In practice, those loans fall to non-agency (non-QM) lenders, such as lenders offering foreign national loans in Texas.
We found no official source describing non-QM foreign national programs, so treat all terms as lender-specific:
- Ask each lender about down payment, documentation, reserve, and loan amount requirements.
- Texas SB 17 may bar buyers tied to designated countries, whatever the loan type.
- If you are purchasing a condominium, the building itself must also meet lender project standards; see our guide to Texas condo loans for how condo project reviews work.
4. DSCR Loans for Texas Investment Properties
International real estate investors purchasing long-term rentals or short-term rentals in Texas can also look at Texas DSCR loans. DSCR stands for debt service coverage ratio. As with foreign national loans, DSCR eligibility for non-U.S. citizens—including required down payments, credit documentation, and cash reserve minimums—varies by lender.
| Buyer Profile | Primary Financing Paths to Explore | How Terms & Eligibility Are Set |
|---|---|---|
| Lawful Permanent Resident (Green Card) | Conventional loans; ask a lender about FHA | Fannie Mae buys these loans under the same terms available to U.S. citizens; the lender warrants legal presence. |
| Non-Permanent Resident (Lawfully Present in U.S.) | Conventional loans | Fannie Mae buys these loans under the same terms available to U.S. citizens; the lender warrants legal presence. |
| Non-Resident Foreign National (Living Abroad) | Non-QM Foreign National Loans, Texas DSCR Loans | Not covered by the Fannie Mae rule; terms are lender-specific (and subject to SB 17). |
Check Your Eligibility for a Foreign National or DSCR Mortgage in Texas
ITIN Requirements for Foreign Property Owners
If you need to file a U.S. federal tax return, for example to report rent from a Texas property, and you do not have and are not eligible for a U.S. Social Security number (SSN), you must apply for an Individual Taxpayer Identification Number (ITIN).
According to the IRS and IRS Publication 519 (U.S. Tax Guide for Aliens):
- What an ITIN is: An ITIN is a 9-digit number issued by the IRS to individuals who need a U.S. taxpayer identification number for federal tax purposes, including a nonresident alien filing a U.S. federal tax return.
- How to apply: You apply using IRS Form W-7, generally including your federal tax return with the application.
- Tax use only: As IRS Publication 519 emphasizes, an ITIN is for federal tax use only. It does not entitle you to Social Security benefits and does not change your employment or immigration status in the United States.
- ITIN expiration and renewal: Keep your number active once issued. Under IRS rules noted in Publication 519, ITINs that were not used on a federal income tax return for tax year 2022, 2023, or 2024 expired on December 31, 2025, and must be renewed if needed for a 2025 return.
How Taxes Work for Foreign Owners of Texas Real Estate
Texas is well known for having no state personal income tax—a protection locked into Article VIII, Section 24-a of the Texas Constitution, alongside constitutional bans on state capital gains taxes (Section 24-b), state wealth taxes (Section 25), and state estate or inheritance taxes (Section 26). Texas also levies no state-level property tax (Section 1-e).
Instead, foreign owners of Texas real estate plan around local Texas property taxes and federal IRS tax rules.
Local Texas Property Taxes and the Homestead Exemption
Counties, cities, school districts, and special districts levy local property taxes across Texas, and the bill depends on the local combination of rates.
However, how you use the home affects your tax bill:
- Primary residences: Under Texas Tax Code Section 11.13, a qualified residence homestead receives a $140,000 school district tax exemption (for tax year 2025 and later) and a 10% annual cap on appraised value increases (Section 23.23) starting January 1 of the year after you first qualify. To claim the Texas homestead exemption, the home must be occupied as your principal residence, and filing Form 50-114 with the county appraisal district generally requires a copy of a Texas driver's license or state ID showing the homestead address (Section 11.43(n)).
- Rental and vacation properties: Under Tax Code Section 11.13(j), a property that is not occupied as the owner's principal residence does not qualify for the residence homestead exemption or the 10% homestead appraisal cap.
Federal Taxation of Rental Income for Nonresident Aliens (IRS Publication 519)
If you are a nonresident alien for U.S. federal tax purposes and you rent out a Texas property, IRS Publication 519 outlines two very different ways your rental income can be taxed at the federal level.
| Federal Tax Method | Tax Rate & Base | Deductions Allowed? | IRS Forms Involved |
|---|---|---|---|
| Default Treatment (FDAP Income) | 30% (or lower tax treaty rate) on gross rental income | No (the tax applies to the gross amount) | Withheld by the payer, such as the tenant, and reported on Form 1042-S; no Form 1040-NR required if tax liability is fully satisfied by withholding. |
| Net-Basis Election (IRC Section 871(d) or Treaty) | Graduated U.S. federal income tax rates on net rental income | Yes (deductions attributable to the real property income) | File Form W-8ECI with the payer so 30% is not withheld; report on Schedule E (Form 1040) with Schedule 1, attached to Form 1040-NR. |
How to Make the Net-Basis Election Under IRC Section 871(d)
Nonresident alien landlords may want to review the Internal Revenue Code Section 871(d) net-basis election with a U.S. tax professional. According to IRS Publication 519:
- What the election does: You can choose to treat all income from real property located in the United States and held for the production of income as income "effectively connected with a trade or business in the United States." That allows you to claim deductions attributable to the rental income so that only your net income is taxed. (Making this election does not treat a nonresident alien who is not otherwise engaged in a U.S. trade or business as being engaged in a U.S. trade or business for other purposes.)
- How to make the choice: You make the election by attaching a formal statement to your federal income tax return (Form 1040-NR) or an amended return for the year of the choice. The statement must specify that you are making the choice under IRC Section 871(d) (or a specific tax treaty) and include a complete list of all your U.S. real property interests, their locations, major improvements, dates of ownership, your income from each property, and details of any prior elections or revocations.
- Stopping the 30% gross withholding: Once you choose to treat the rental income as effectively connected income, you can provide Form W-8ECI to your property manager or tenant so that 30% is not withheld from your gross rents.
- Duration of the choice: Once made, the election stays in effect for all later tax years unless you revoke it. You can revoke it for the election year without IRS approval by filing Form 1040-X within the amendment window, but revoking it for later years after that window requires IRS approval under Treasury Regulation Section 1.871-10(d)(2).
Note: Always consult a cross-border CPA or U.S. tax attorney to determine whether a tax treaty applies to your country of residence and whether the Section 871(d) election fits your investment plan.
FIRPTA Withholding When Selling Texas Property
When a foreign person sells U.S. real property—including a house, condo, or land in Texas—the sale is subject to the Foreign Investment in Real Property Tax Act (FIRPTA) under 26 U.S.C. Section 1445.
FIRPTA withholding is a prepayment of tax, not the final tax. The seller's actual tax is figured on the seller's U.S. return, so a foreign seller should work with a tax professional.
Who Withholds and Files?
According to the IRS, in most cases the buyer (transferee) is the withholding agent. The buyer withholds the required percentage of the "amount realized" (cash paid or to be paid, principal only, plus the fair market value of other property transferred, plus liabilities assumed or to which the property is subject) and reports it to the IRS using Forms 8288 and 8288-A, generally by the 20th day after the date of disposition.
FIRPTA Withholding Rates and Residence Exceptions (26 U.S.C. Section 1445)
While the general FIRPTA withholding rate is 15% of the amount realized, federal law reduces or eliminates withholding when an individual buyer purchases the property for use as a residence:
| Sale Price ("Amount Realized") | Buyer's Intended Use | FIRPTA Withholding Rate | Statutory Authority |
|---|---|---|---|
| $300,000 or less | Individual buyer will use as a residence (meets 50% occupancy test) | 0% (Exempt) | 26 U.S.C. Section 1445(b)(5) |
| Over $300,000 up to $1,000,000 | Individual buyer will use as a residence (meets 50% occupancy test) | 10% | 26 U.S.C. Section 1445(c)(4) |
| Over $1,000,000 (or any price if not buyer's residence) | Investor purchase, entity buyer, or price above $1,000,000 | 15% | 26 U.S.C. Section 1445(a) |
The 50% Residence Occupancy Test
For the 0% exemption (up to $300,000) or the reduced 10% rate (over $300,000 up to $1,000,000) to apply, the IRS requires that:
- The buyer must be an individual; and
- The buyer or a member of the buyer's family must have definite plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two 12-month periods following the date of transfer.
The IRS also lists a withholding certificate from the IRS that excuses withholding as one of the exceptions. A tax professional can tell you whether to apply for one.
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Step-by-Step Process to Buy a House in Texas as a Foreign Buyer
Whether you are buying in Houston, Dallas-Fort Worth, Austin, San Antonio, or a smaller Texas market, following a structured process helps avoid legal, banking, and closing delays.
Step 1: Confirm Your Eligibility Under Texas SB 17 and Federal Rules
Before touring homes or wiring earnest money, verify that your citizenship, domicile, and visa status are not restricted under Texas Property Code Chapter 5, Subchapter H (SB 17). SB 17 does not name countries, but the bill's findings discuss China, Russia, Iran, and North Korea. If you or an entity you control have any connection to a designated country, speak with a Texas real estate attorney first—especially to confirm whether you qualify for the lawful permanent resident exemption or the residence homestead carve-out.
Step 2: Choose Your Texas Market and Property Type
Home prices vary substantially across Texas. According to the Texas Real Estate Research Center at Texas A&M University (TRERC), the statewide MLS median sale price in calendar year 2025 was $335,000 (and $334,021 year-to-date through September 2026). Among the four largest metros in 2025, TRERC reported median sale prices of:
- San Antonio-New Braunfels MSA: $305,000
- Houston-Pasadena-The Woodlands MSA: $334,340
- Dallas-Fort Worth-Arlington MSA: $390,000
- Austin-Round Rock-San Marcos MSA: $430,000
If you plan to buy a short-term rental, check the city's rules before you shop. Austin, San Antonio, Fort Worth, and Galveston each have their own short-term rental license, permit, or registration rules, and Texas hotel occupancy tax applies to people who rent out their houses short term.
Step 3: Set Up Your U.S. Banking, Tax ID, and Mortgage Pre-Approval
If you plan to finance your purchase, talk to a mortgage team early so you know which requirements to buy a house in Texas apply to your residency status:
- Gather your passport, U.S. visa or green card (if applicable), income records, and bank statements showing your down payment and cash reserves.
- Confirm with your lender whether funds for closing must be seasoned in a U.S. bank account prior to closing.
- Consult a U.S. CPA about applying for an ITIN (Form W-7) if you do not have a Social Security number and plan to earn rental income or file U.S. tax returns.
Step 4: Hire a Texas Real Estate Agent and Make an Offer
Work with a licensed Texas real estate agent experienced with international buyers. Once you select a property, your agent can help you review recent sales and submit a purchase contract.
Step 5: Complete Inspections, Appraisal, and Underwriting
Ask your agent about inspection timing in your contract. If you are using a mortgage, your lender will tell you what appraisal and underwriting steps apply, including for a Texas DSCR loan.
Step 6: Close Through a Texas Title Company
If you are purchasing from abroad, tell your lender and title company early so they can explain which signing arrangements they accept well before your closing date.
Next Steps for Foreign Buyers in Texas
Foreign nationals can legally buy and finance real estate across Texas in 2026, provided they comply with Texas SB 17 and plan ahead for local property taxes, IRS rental income elections, and future FIRPTA rules. Pairing a knowledgeable Texas real estate agent, a cross-border tax advisor, and a lender experienced with non-U.S. citizen borrowers will help keep your purchase smooth from pre-approval to closing.
Our team at Make Texas Your Home helps international buyers, visa holders, and lawful permanent residents compare conventional, FHA, DSCR, and foreign national loan options in Texas and get connected with a participating lender that fits their profile.
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