The United States’ strong legal system and stable economy have attracted many international investors looking for real estate opportunities. However, recent legal developments are currently changing the way foreign ownership of real estate is regulated. A growing number of states are implementing laws that restrict or outright ban property ownership by foreign nationals, with an added emphasis towards those from countries considered national security threats.
In this article, these state-level restrictions are examined and compared to federal oversight, along with detailing what foreign investors should do to navigate this complex and shifting legal landscape.
By 2023, more than two dozen states had begun implementing laws that restrict foreign ownership of certain real estate. Although many focused on protecting agricultural land or property near military bases and critical infrastructure, some states took more expansive approaches.
Texas has recently implemented one of the most extensive restrictions with its Senate Bill 17, effectively banning nationals or entities linked to designated adversary countries from acquiring almost any kind of real estate or long-term leases within the state. According to the law, limited countries are China, Russia, Iran, and North Korea, but the list may expand. The prohibition also applies broadly to leasehold interests and all types of real property, including residential, commercial, industrial, agricultural, mining, mineral, and water rights. Any violation of this law includes various criminal penalties and civil fines. Only those who are U.S. citizens, lawful permanent residents, and entities owned by such individuals are exempt. Leases that are shorter than a year are also exempt. However, this measure only applies to acquisitions made on or after September 1, 2025. Any property acquired before this date is not subject to forced divestment.
Florida Senate Bill 264 prohibits foreigners from owning agricultural land and holding any interest in property within 10 miles of any military installations or critical infrastructure. Additionally, it limits individuals living in China who are not U.S. citizens or lawful permanent residents from purchasing any real estate within the state. While any properties owned before July 1, 2023, are exempt, they must be registered with the Florida Department of Commerce or the Department of Agriculture by a specified deadline. Any property that violates this bill is subject to forfeiture, with the possibility of additional criminal penalties and fines. Furthermore, this bill requires that personal medical information be stored physically within the continental U.S., U.S. territories, or Canada. This requirement applies to all health care providers who use certified electronic health record (EHR) systems.
Arkansas's strict Act 636 states that a "prohibited foreign party" (“PFP”) is prohibited from agricultural land investments even if the PFP plans to use the land for non-farming purposes. Additionally, a “prohibited foreign-party-controlled business" ("PFPCB") is not allowed to acquire any interest in any real property located within the state. Most prominently, Arkansas stands out because of its lack of a grandfather clause. This exclusion may potentially lead to foreign landowners facing forced divestment of the legally acquired property they obtained before these restrictions were implemented. Arkansas went further to enforce these restrictions by creating harsh criminal penalties and an Office of Agricultural Intelligence within the state Department of Agriculture to investigate any of these potential violations. Potential violations include felony charges, up to two years in prison, and $15,000 fines.
North Dakota established House Bill 1135, which expanded existing law to include foreign governments and foreign government-controlled entities. Rather than placing limitations on only certain adversary countries, this law applies to all foreign governments and state-controlled enterprises globally. Yet, an included grandfather clause permits any past acquisition of agricultural land by a foreign government to remain valid. Further exemptions include any agricultural land purchased for the use of an industrial site, for inheritance, to enforce liens, or for rail service providers. Additionally, state-controlled enterprises are allowed up to 160 acres for agricultural research or experimental purposes. Any individuals or entities that qualify for these exemptions are required to provide regular reports of their holdings to the North Dakota agricultural commissioner. If a foreign government or entity acquires farmland in violation of this law, it must divest the land within 24 months. Overall, North Dakota HB 1135 establishes a broad prohibition on foreign governments from possessing any agricultural land within the state, making this state among the strictest regarding this issue.
Alabama instituted its Property Protection Act, which targets and prohibits “foreign principals” from acquiring title or a “controlling interest” in agricultural property or any real property within 10 miles of a military installation or critical infrastructure within the state. “Foreign principals” refers to specific countries’ governments, government officials, or political parties, along with their members. Any country or government sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is restricted and counted as a “foreign principal.” Unusually, private individuals from these countries are still allowed to acquire land; this law only applies to governments, officials, and political parties. Furthermore, it was detailed that only foreign principals are held liable and not involved settlement providers such as real estate brokers or attorneys. A grandfather clause was added to protect any foreign entity from having ownership of restricted property before August 1, 2023. However, the law remains unclear on whether the phrase “controlling interest” includes leases, which has allowed some foreign principals to continue leasing land. Furthermore, enforcement and penalties for any violations have not been defined clearly. All in all, Alabama holds one of the narrowest state-level foreign land ownership restrictions, as it only applies to foreign governments, their officials, and political parties from specific countries and does not impact targeted individuals.
Altogether, it is clear that these state laws vary in severity. While most state restrictions against foreign entities and individuals only apply to agricultural land or land near military/critical infrastructures, Texas places a ban on all real estate. Enforcement of these limitations includes civil penalties, criminal charges, and forced divestment. While most states protect previous ownership with a grandfather clause, notable states such as Texas and Arkansas do not guarantee such protection. In 2025, this restrictive trend is collecting legislative momentum. As of August 4, 2025, six states are currently considering 22 bills that could result in increased limitations on foreigners from acquiring property. Yet, the focus is more on targeting foreign adversaries rather than general foreign ownership, due to escalating concerns for national security risks.
Lawmakers in many states have focused foreign land ownership restrictions on the need for national security measures. They tend to highlight concerns about espionage, agricultural control, and proximity to military bases to strengthen their stance. Economic nationalism is also an added point used to amplify opposition to foreign investment. While support for these restrictions tends to be bipartisan, most bills are sponsored and strongly backed by Republicans. However, criticism exists within these legislatures and often underlines constitutional, economic, or anti-discrimination concerns. It is a concern that these laws may be politically motivated and follow xenophobic or anti-immigrant narratives, especially when bans disproportionately target certain nationalities. For example, Florida Senate Bill 26 specifically targets Chinese investors rather than following a more risk-based approach. However, most states follow voter sentiment and respond to constituent pressure and electoral incentives. The legislative process also gains increased traction following heightened geopolitical tensions, particularly when U.S.-designated adversaries such as China and Russia are involved. Therefore, legislative movement on real estate restrictions tends to be supported by popular sentiment and support from state voters, rather than by politicians pushing xenophobic policies.
Public sentiment on these measures is often mixed and nuanced, varying from state to state. Some states, such as Florida and Texas, have seen a majority support for limitations on land purchases by foreign entities, especially near military bases or agricultural land. Yet, support seems to decline when laws are too broad and specifically target individuals based solely on national origin or visa status, rather than their relation to foreign governments. However, evidence reveals that the general public may not be fully aware of the legal implications of these laws, proving a critical gap between legislative action and informed public consensus. Opponents of these measures further express serious concerns about the discriminatory nature and potential economic harm of these laws, arguing that they unconstitutionally target individuals based on national origin and could be detrimental to state economies. Overall, there is mixed sentiment with one side demanding tighter restrictions and the other side protesting these bans for being unjust and risky.
For the most part, both legislators and voters agree and support restrictive measures on foreign land ownership. There has been genuine public concern about foreign ownership of U.S. land, particularly land close to sensitive infrastructure. However, some argue that these laws are more legislatively driven, as their political momentum often outpaces public understanding or support. Thus, while these restrictions align with general concerns, their details tend to raise serious constitutional, economic, and human rights questions.