You can buy a house in Texas without living there. Texas law does not require residency to own real estate, and out-of-state buyers hold the same deed, title, and legal protections as someone who lives next door to the property. What changes is the math: higher property taxes without the homestead exemption, stricter mortgage terms on a home you won’t occupy, and a few logistical steps for closing from another state.
Who Can Buy
If you are a U.S. citizen living in another state, there is no registration, no permit, and no residency timeline. You buy the same way a Texan does.
Foreign nationals also have broad rights to buy Texas real estate, with one recent exception. Senate Bill 17, which took effect September 1, 2025, prohibits individuals and entities connected to China, Russia, Iran, and North Korea from acquiring any interest in Texas real property, including leases shorter than one year.1Texas Legislature Online. 89(R) SB 17 – Enrolled Version – Bill Text The restriction covers government entities of those countries, companies headquartered or controlled there, and individuals who are citizens or domiciled there. U.S. citizens and lawful permanent residents are fully exempt, even if they originally came from one of the four countries. A narrower exception lets someone domiciled in a designated country but lawfully present in the United States buy a residential property as a primary home. The law does not reach back to property acquired before September 1, 2025.
Financing a Home You Won’t Live In
Lenders classify your purchase as either a second home or an investment property, and each category carries its own down payment rule.
For conventional Fannie Mae loans, a second home purchase allows up to 90% loan-to-value, meaning 10% down. A single-unit investment property caps at 85% LTV, so plan on at least 15% down. Two-to-four-unit investment properties drop to 75% LTV.2Fannie Mae. Eligibility Matrix April 1, 2026 Interest rates on non-owner-occupied loans run higher than owner-occupied rates.
Misrepresenting an investment property as owner-occupied to qualify for better terms is occupancy fraud. Lenders can call the loan due in full if they catch it. Make sure the loan application and your insurance both reflect how you actually intend to use the house.
Foreign buyers without U.S. credit history face steeper requirements. Many lenders ask for 30% to 50% down from foreign borrowers, and some portfolio lenders will not lend to non-residents at all. Expect longer underwriting if you are applying from abroad.
Property Taxes Without the Homestead Exemption
This is the biggest financial surprise for out-of-state buyers. Texas has no state income tax, but effective property tax rates sit around 1.60% of appraised value, well above the national average. Residents trim that bill with the homestead exemption. You can’t.
To qualify for the homestead exemption, you have to use the property as your principal residence and hold a Texas driver license or state ID with an address matching the property.3Texas Comptroller of Public Accounts. Application for Residence Homestead Exemption The school district homestead exemption alone removes $140,000 from the taxable value, and local taxing units can add an optional exemption of up to 20%.4Texas Comptroller of Public Accounts. Property Tax Exemptions
On a $400,000 home, a resident claiming the $140,000 school exemption pays school taxes on $260,000 of value. You pay on the full $400,000. Depending on local rates, the gap easily tops $2,000 a year and widens as property values climb. Build the full tax bill into your numbers from the start.
The Right Insurance Policy
A standard homeowner’s policy assumes the owner lives in the house. For a rental or vacation property, you need a landlord or dwelling-fire policy instead. These typically cost 15% to 25% more than owner-occupied coverage because unoccupied or tenant-occupied properties present higher risk.
Coverage is also structured differently. A landlord policy protects the structure and your landlord liability but excludes a tenant’s belongings. It swaps the “loss of use” coverage that pays your temporary living expenses for “loss of rental income” coverage when a covered event makes the property uninhabitable. Watch the vacancy clause: most policies deny claims if the property sits empty beyond 30 to 60 days, which matters if you plan gaps between tenants or seasonal visits.
Closing on the Property Remotely
You do not have to fly to Texas. Non-resident purchases typically close in one of three ways.
Mail-Away Closing
The title company couriers your documents to you. You sign in front of a notary in your home state and ship the package back. Mobile notaries will come to your home or office for a fee. Overnight shipping delays can push a closing date, so build in a buffer day.
Remote Online Notarization
Texas authorizes online notaries to notarize documents through a live audio-video call instead of in-person signing.5Office of the Texas Secretary of State. Getting Started as an Online Notary The notary verifies your identity through a third-party identity-proofing service during the call and records the session. This is the fastest route and skips the shipping entirely. Confirm in advance that your title company and lender both accept it, since some lenders still restrict it internally.
Power of Attorney
You can authorize someone you trust in Texas to sign closing documents for you. For real estate, use a specific or limited power of attorney that names the exact property and transaction. A general power of attorney is too broad and most title companies will reject it. The document also has to be recorded with the county clerk in the county where the property sits. Get the exact POA language approved by your title company and lender before closing day; a rejection at the table means starting over.
Should You Buy Through an LLC?
Many out-of-state investors hold Texas property through a limited liability company rather than in their personal name. The LLC adds a liability layer: a claim from an injury on the property or a tenant lawsuit targets the LLC’s assets rather than your personal savings. Tax treatment can also differ, which is a conversation to have with your accountant.
Forming a Texas LLC takes a certificate of formation filed with the Secretary of State and a $300 filing fee.6Office of the Texas Secretary of State. Business Filings and Trademarks Fee Schedule Every Texas LLC must designate and continuously maintain a registered agent with a physical street address in the state. The agent has to be a Texas resident or an organization authorized to do business in Texas, and someone must be at that address during normal business hours to accept legal documents.7State of Texas. Texas Business Organizations Code 5-201 – Designation and Maintenance of Registered Agent and Registered Office A P.O. box or virtual mailbox does not qualify. Commercial registered agent services handle the role for an annual fee if you do not know anyone local.
Texas imposes a franchise tax on LLCs, but the no-tax-due threshold for the 2026 report year is $2,650,000 in total revenue.8Texas Comptroller of Public Accounts. Franchise Tax A single rental property almost never comes close. You may still have an annual filing obligation even with no tax due, and missing it can cost your LLC its good standing, which complicates any later sale or refinance.
Title Insurance and Closing Costs
Title insurance premiums in Texas are set by the Texas Department of Insurance and are not negotiable. Every title company charges the same rate for the same coverage amount. A $300,000 policy runs roughly $1,768. A $500,000 policy runs about $2,756. The formula is $780 for the first $100,000, plus $4.94 per thousand up through $1,000,000.9Texas Department of Insurance. Texas Title Insurance Premium Rates
Expect the usual other charges beyond title insurance: escrow and closing fees from the title company, county recording fees, and lender costs like appraisal, credit report, and origination. A mail-away closing adds courier shipping and the mobile notary fee. None of these are higher for non-residents, but the Texas fee structure may not match what you are used to in your home state.
Extra Rules for Foreign Buyers
If you are a foreign national, a federal tax layer applies on top of everything above.
FIRPTA Withholding
The Foreign Investment in Real Property Tax Act requires the buyer of U.S. real estate to withhold a portion of the sales price when the seller is a foreign person. The standard rate is 15% of the gross amount realized.10Office of the Law Revision Counsel. 26 USC 1445 – Withholding of Tax on Dispositions of United States Real Property Interests The buyer files Form 8288 and remits the funds to the IRS by the 20th day after closing.11Internal Revenue Service. Reporting and Paying Tax on U.S. Real Property Interests
Two things to know. If you are a foreign buyer purchasing from a foreign seller, you are the one legally responsible for withholding. And when you later sell, your buyer will withhold from your proceeds. The withheld amount is a prepayment against capital gains tax, not an additional tax, and you can claim a refund of any overpayment on your U.S. return.
Reduced rates apply when the buyer intends to use the property as a personal residence:
- Sales price of $300,000 or less: no withholding required.10Office of the Law Revision Counsel. 26 USC 1445 – Withholding of Tax on Dispositions of United States Real Property Interests
- Sales price of $300,001 to $1,000,000: withholding drops to 10%.
- Over $1,000,000: the full 15% applies regardless of intended use.
Reduced rates only apply when the buyer will live in the property. Investment purchases trigger the full 15% at any price.
Taxpayer ID and Rental Income
Foreign buyers without a Social Security number need an Individual Taxpayer Identification Number to handle FIRPTA filings and report rental income. You apply with IRS Form W-7.12Internal Revenue Service. ITIN Guidance for Foreign Property Buyers Sellers Processing takes several weeks, so start early.
Texas has no state income tax, which is part of its appeal to out-of-state investors. But rental income from U.S. real property is subject to federal income tax wherever you live. Foreign owners are generally taxed at a flat 30% on gross rental income unless they elect to treat the income as effectively connected with a U.S. trade or business, which allows deductions and graduated rates on net income. The election almost always produces a lower bill, and it requires a U.S. return each year. A tax professional familiar with international real estate is worth the cost.