Bernal’s Out-Of-State Buyer Ban Skips Rentals And New Builds

The text as introduced · 441 words

By: Bernal
H.B. No. 3967

A BILL TO BE ENTITLED

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 J to 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.