Texas has passed six significant laws affecting real estate purchases, property taxes, insurance claims, squatter removal, and HOA regulations. These laws include banning property purchases by nationals from certain countries, constitutional prohibition of state capital gains tax, expanded homestead exemptions, insurance claim reforms, a 24-hour squatter removal process, and increased HOA transparency and fee caps, all aimed at protecting homeowners and buyers.
Texas has recently passed six new laws that bring fundamental changes to various aspects of property ownership, taxation, insurance, and homeowners' associations (HOAs). These laws impact who can buy property, how property taxes are calculated, insurance claim processes, squatter removal, and HOA operations. This article explores each of these laws in detail to help homeowners, buyers, and investors understand their rights and the new legal landscape.
Effective September 2025, SB17 prohibits individuals and entities from certain countries deemed national security threats—such as China, Russia, Iran, and North Korea—from purchasing property in Texas. This ban applies not only to individuals but also to institutional investors from these countries who might otherwise buy multiple rental properties.
The law exempts those from these countries who have become U.S. citizens or green card holders. However, it does not explicitly exempt H-1B visa holders, who are temporary workers in specialty occupations like technology, engineering, medical science, and finance—fields highly concentrated in Dallas. This restriction reduces the pool of potential homebuyers, especially in a market where home inventory has increased by up to 25%, giving other buyers a competitive advantage.
Texas is known for having no state income tax, and SJR18 takes this further by constitutionally prohibiting the state from imposing any tax on realized or unrealized capital gains. This protection is rare and positions Texas as a long-term capital preservation state.
Capital gains tax typically applies to profits from selling assets like homes. While federal law allows exclusions on home sale profits, most states tax capital gains at the state level. Texas now ensures it will never impose such a tax, benefiting homeowners and investors by protecting their profits from state taxation.
Although the law mentions unrealized gains, it does not affect property taxes, which are considered ad valorem taxes on property value. SJR18 explicitly states it does not prohibit property taxes, so homeowners should not expect changes to their property tax obligations from this law.
Texas has also introduced measures to reduce property taxes through two main changes:
Starting with the 2025 tax year, the mandatory school district homestead exemption increases from $100,000 to $140,000. Seniors and residents with disabilities receive an increased exemption of $60,000, potentially shielding up to $200,000 of assessed value from school taxes.
Under HB3 and SB4, school districts face a 2.5% cap on revenue growth from existing properties year-over-year. If property values rise significantly, the school district must lower its tax rate to keep revenue growth within this limit, preventing large spikes in tax bills due to rising home values.
Texas has enacted major reforms to improve transparency and fairness in insurance claims starting in 2026.
Every residential insurance policy must include a binding appraisal clause. If there is a dispute over loss amounts, homeowners can demand an appraisal where each party selects an appraiser, and a neutral umpire resolves disagreements. This protects homeowners' equity by ensuring accurate claim payouts.
Insurers are required to update credit-based insurance scores every three years, mandating premium adjustments if a homeowner's credit score improves.
Insurers cannot raise premiums solely because of claims resulting from government actions, such as city utility failures or accidents caused by city vehicles, protecting homeowners from unfair rate hikes.
Texas is addressing a squatting crisis with a new law that allows property owners to remove squatters within 24 hours.
A squatter is someone occupying property without permission, such as moving into an abandoned home or staying without a lease. This law applies to true squatters, not former tenants or family members with legal rights.
Property owners file a sworn affidavit with law enforcement verifying ownership. The sheriff or constable then serves a notice to vacate and can remove the squatter immediately without a court hearing. This shifts squatting from a civil eviction issue to a criminal trespass matter, significantly speeding up the removal process.
The law shields sheriffs and property owners from liability for removing a squatter's personal property during the eviction process.
To combat predatory and abusive practices by HOAs, Texas has introduced transparency and accountability measures.
HOAs with 60 or more units or those managed by a management company must maintain a public website containing all governing documents, budgets, and meeting minutes.
The fee for resale certificates, required when selling a home, is now capped at $375, preventing excessive charges that previously could exceed $1,000.
HOAs must file management certificates with the Texas Real Estate Commission, which will maintain a searchable database.
HOAs cannot fine homeowners for brown grass during government-mandated watering restrictions, ensuring compliance with city water conservation is not penalized.
These six new Texas laws represent a significant shift toward protecting homeowners, buyers, and investors. From restricting foreign purchases and safeguarding capital gains to reforming insurance claims and empowering property owners against squatters and HOA abuses, Texas is setting a new standard for property rights and financial protections. Homeowners and buyers should familiarize themselves with these changes to fully understand their rights and opportunities in the evolving Texas real estate landscape.
For those frustrated with property taxes, these laws offer some relief but do not eliminate taxes entirely. Staying informed and prepared remains essential in navigating Texas property ownership successfully.
Wendy Panel, Dallas Realtor and Broker
