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🏡 Texas Real Estate Faces Legal Crossroads: What SB 17 Means for Buyers, Investors, and Agents
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By Jason Henry, Realtor | Austin & San Marcos Markets
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Texas real estate is no stranger to change—but Senate Bill 17 (SB 17), which took effect September 1, 2025, marks a seismic shift. The new law bans property purchases and long-term leases by foreign nationals from countries including China, Russia, Iran, and North Korea. Now, a class-action lawsuit filed in Austin is challenging its constitutionality—and the outcome could reshape how we do business across the state.
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🚫 What SB 17 Does
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SB 17 prohibits citizens and companies from designated countries from:
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Buying or leasing property in Texas
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Entering into leases longer than 12 months
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Investing in real estate assets
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Violations carry steep penalties—up to $250,000 or 50% of the property’s market value. Individuals could face felony charges.
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⚖️ The Legal Challenge
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Three Chinese citizens with ties to Texas are suing the state, arguing that SB 17:
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Violates the U.S. Constitution
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Discriminates against people of Chinese descent
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Conflicts with federal authority over foreign affairs and investment
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One plaintiff, a Baylor University student on an F-1 visa, may be forced to relocate due to lease restrictions. Others fear they’ll be forced to sell their homes.
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📉 Market Impacts for Agents and Investors
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As a Realtor active in Austin and San Marcos, I’m watching this closely. Here’s what it means for our market:
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Investor Uncertainty: Foreign buyers—especially from China—have historically contributed to Texas’s growth. Their sudden exclusion could dampen demand in certain segments.
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Lease Disruption: Landlords may face vacancies or shorter lease cycles, especially in college towns and urban hubs.
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Compliance Pressure: Agents must now vet buyers more carefully to avoid legal exposure.
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📈 Texas Still Growing—But With New Constraints
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Despite SB 17, Texas remains a powerhouse:
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In 2023, we led the nation in homebuilding, with 15% of all new permits.
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Builders are focusing on smaller, more affordable homes—many under $350,000.
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Austin has tipped into a buyer’s market, offering opportunities for savvy investors.
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But affordability remains a challenge, and this law adds another layer of complexity.
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💬 My Take as Your Local Expert
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Whether you’re buying, selling, or investing, it’s critical to stay informed. Laws like SB 17 can shift the landscape overnight. As your Realtor, I’m committed to helping you navigate these changes with clarity, compliance, and confidence.
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If you have questions about how SB 17 affects your property plans—or want help structuring deals that stay within legal bounds—reach out anytime.
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