Issue to Watch: States Restricting Foreign Property Ownership

In a period of increasing international tension, one state-level issue that has quickly gained prominence is foreign control of property within the United States. Restrictions on foreign land ownership have become a major issue over the last few years and this continued into 2024, with at least 22 states enacting a range of laws focusing on this topic, although specific language used by different states varies significantly.

Foreign land ownership bills can apply to a range of foreign actors, including foreign governments and governmental subdivisions, foreign businesses, foreign citizens, and in some cases even foreign citizens who are permanent U.S. residents. The scope of foreign entities affected also varies, with some bills targeting specific adversaries such as China, Russia, Iran, and North Korea, and other bills applying to all foreign actors.

Foreign land ownership restrictions may also attach to different types of land. Many of the most common bill types apply limits to ownership of militarily or politically sensitive land or agricultural land. However, other types of land are sometimes included, as are broader restrictions on any foreign land ownership.

2024 State Legislative Recap

In 2024, a total of 9 states enacted foreign land ownership restriction bills, while bills of this type were introduced in 32 states. Indiana HB 1183 provides an example of restrictions on both types of owners and types of land. The bill applies to “prohibited persons” who are citizens of foreign adversaries under the Code of Federal Regulations, which includes citizens of China, Cuba, Iran, North Korea, Russia, and Nicolas Maduro’s Venezuela. It also applies to business entities that are wholly or majority owned by citizens or the government of a foreign adversary, or that are headquartered in the territory of a foreign adversary. The bill does make an exception for dual citizens who also have U.S. citizenship. It restricts affected parties from owning land in Indiana within ten miles of a military base. Additionally, it forbids prohibited persons from owning or leasing agricultural land or mineral or water rights on agricultural land in the state. The bill gives the Attorney General power to prosecute suspected violations, with land acquired in contravention of the bill subject to divestiture. Notably, HB 1183 exempts renewals of leases with unchanged terms, a carveout designed to accommodate one specific leaseholder.

Foreign land ownership bills passed in other states often reflect variations on these themes, as well as modifications to earlier laws. For example, Nebraska enacted two relevant bills in 2024. One of these restricts persons associated with countries of concern from buying land near military bases, while the other modernizes restrictions on foreign ownership of agricultural land to update exemptions and enforcement mechanisms. Tennessee enacted a law changing terminology and updating prohibited methods of land acquisition for prohibited foreign parties. Utah also enacted legislation to modify previous constraints on restricted foreign entities seeking to purchase land, focusing on China, Iran, North Korea, and Russia. 

2025 State Legislative Outlook

With international affairs grabbing the headlines, expect foreign land ownership to continue to be debated in state legislatures in 2025. This area of law is still fairly new, and with more evidence becoming available as to the success of existing state laws, additional states may be inspired to pass their own legislation. Moreover, lawmakers in several states have now gone back to amend initial versions of foreign land ownership laws, and this trend is also likely to continue. These factors also could lead to a greater willingness for blue or purple states to more seriously consider some version of foreign land ownership bills, which thus far have been passed primarily in red states.

One of the most prominent foreign land ownership bills was enacted in Florida in 2023, notable both for its breadth and because it has led to a lawsuit filed by affected parties. This law includes restrictions on agricultural land purchases by persons from countries of concern, but more controversially it also takes aim at real property acquisition by China or Chinese citizens. It prohibits people who are not U.S. citizens or permanent residents from purchasing property, including homes, if their permanent home is in China. These provisions led to lawsuits in which the Eleventh Circuit Court of Appeals halted enforcement of the law while the case proceeds. Oral arguments followed in April, and rulings in this case could influence future developments in this space.