Some New (Almost) Laws of Interest - Texas Real Estate Edition, 2025

Bills on the Governor's Desk, and a Proposed Constitutional Amendment

The 2025 Texas Legislature was busy and passed several Bills that are now on the Governor’s desk, as well as a proposed Constitutional Amendment, which may be of interest to you. This article addresses those Bills and a proposed Constitutional Amendment in the real estate arena.

SJR 18: Prohibition on the Tax of Unrealized/Realized Capital Gains

Senate Joint Resolution 18 introduces a state constitutional amendment to explicitly prohibit the Texas state government from levying a tax on any type of capital gains. The prohibition would extend to individuals, families, estates, and trusts. This bill is crucial because it would prevent the state government from using capital gains as a revenue stream, unlike a majority of other states. This joint resolution has been passed, and the amendment is on the ballot for November 2025.

HB 2468: Expands the Right to Terminate a Purchase of Real Property

House Bill 2468 allows a purchaser of real property to terminate a contract if the seller does not inform them that the property is located in a public improvement district. The purchaser has seven days after receiving notice to exercise this right to terminate.

SB 17: Texas Foreign Land Purchase Bill

Senate Bill 17 would give Governor Abbott expanded power to restrict which countries, individuals, and other entities can purchase property in Texas. Previously, Governor Abbott had the power to restrict foreign land purchases only to countries that the US National Intelligence Directors had designated as national security threats

HB 9: Raising Personal Property Tax Exemption

House Bill 9 would create $3 billion in tax breaks indirectly by sending that amount to school districts, which, in theory, would lower the tax rates for residents. This is in line with similar legislative efforts to use the state surplus to pay for property tax reductions. However, this bill favors business owners, as opposed to homeowners, who will receive up to a $250,000 tax exemption on their inventory (also known as business personal property) from all taxing entities (including school districts).

SB 4: Expansion of Homestead Exemptions

Senate Bill 4 would reduce the home value that can be taxed to pay for schools from $100,000 to $140,000. This bill would have a significant impact on most homeowners, given that the average value of a home in Texas is approximately $302,000, according to Zillow data.

SB 15: Reduction of Minimum Lot Size

Senate Bill 15 would reduce the minimum amount of land required to construct a single-family home in half, from 5,000 to 7,000 square feet of land to around 3,000 square feet. This bill is applicable for municipalities with at least 150,000 residents in counties with a population of 300,000 or more, with an exception for homeowners' associations and restrictive covenants that would prevent smaller lot sizes. Senate Bill 15 was developed to reverse the upward trend in homebuying costs in Texas.

SB 38: Anti-Squatter Proposal

Senate Bill 38 makes it easier for landlords to evict tenants who do not pay rent on time. The bill requires courts to act within 10 to 21 days of a property owner's filing. It eliminates appeals that stall evictions, allowing for more judicial discretion. State law requires landlords to provide written notice three days before filing for eviction. However, this bill loosens that restriction by allowing landlords to have more flexibility in the means of sending notices to tenants.

SB 840: Allowance of Mixed-Use Residential and Multi-Family Housing to be Built without Rezoning

Senate Bill 840 enables municipalities to allow mixed-use residential use and multi-family residential use to be built on land previously zoned for office, commercial, retail, warehouse, or mixed-use use or development. Through this bill, mixed-use residential or multi-family residential projects can proceed without the need for a zoning regulation change. This bill only applies to municipalities with populations exceeding 150,000 people in counties with populations exceeding 300,000 people. This bill does not apply to a zoning classification that allows heavy industrial use, land that is located either (i) one thousand (1,000) feet from an existing heavy industrial use site or (ii) three thousand (3,000) feet from an airport or military base, and an area designed by a municipality as an accident potential zone or clear zone.

These are just a few new (almost) laws passed by a busy Legislature. We will continue to update you on other new (almost) laws that may be of importance to you. We hope these were informative. Should you desire additional information or need guidance, when it matters™, contact Ron Holmes.

Article by Ronald L. Holmes. 

Yacob Abraham and Grace Payne, summer Law Clerks with Holmes Firm PC, did the heavy lifting required to research and summarize the myriad of new Bills passed by the Legislature this Session.