TITLE: Relating to the purchase of or acquisition of single-family homesteads by certain out-of-state entities.

SUMMARY: Relating to the purchase of or acquisition of single-family homesteads by certain out-of-state entities.

FULL TEXT:
AN ACT relating to the purchase of or acquisition of single-family homesteads by certain out-of-state entities. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 5, Property Code, is amended by adding Subchapter Jto read as follows: SUBCHAPTER J. PURCHASE OF OR ACQUISITION OF SINGLE-FAMILY HOMESTEADS BY CERTAIN OUT-OF-STATE ENTITIES. Sec. 5.221. DEFINITIONS. In this subchapter: (1) "Business" has the meaning assigned by Section 1.002, Business Organization Code. (2) "Corporation" has the meaning assigned by Section 1.002, Business Organization Code. (3) "Organization has the meaning assigned by Section 1.002, Business Organization Code. (4) "Homestead" means a single-family dwelling for which an individual claims an exemption under Section 11.13, Tax Code. (5) "Single-family homestead" means: (A) a structure designed for residential use by one family; or (B) a unit, whose owner owns, directly or through a nonprofit organization, an undivided interest in the underlying real estate, including property owned in common with others which provide a financial contribution toward the ownership of the property; and (C) claims an exemption under Section 11.13, Tax Code. (6) "Hedge fund" means a pool of money compiled by investors with the intent to invest in projects in an effort to make a positive return on investment. (7) "Institutional investor" means an entity that invests on the behalf of others including but not limited to individuals, organizations, corporations, businesses, or hedge funds. Sec. 5.222 PURCHASE OF OR ACQUISITION OF SINGLE-FAMILY HOMESTEADS BY CERTAIN OUT-OF-STATE ENTITIES PROHIBITED. (a) Notwithstanding any other law, the following may not purchase or otherwise acquire title to a single-family homestead in this state: (1) a company, business, corporation, hedge fund, or institutional investor that is: (A) headquartered outside the state; (B) directly or indirectly held or controlled outside of the state; or (C) owned by or whose majority stock or other ownership interest is held or controlled outside the state; and (D) not the owner of a homestead within the state. (b) This section does not apply to a nonprofit organization purchasing or acquiring the title to real property for the purpose of providing affordable housing. SECTION 2. The changes in law made by this Act apply only to the purchase of or acquisition of a single-family homestead on or after the effective date of this Act. The purchase of or acquisition of a single-family homestead before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act and that law is continued in effect for that purpose. SECTION 3. This Act takes effect September 1, 2025.