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.