Do you own a land but only have a tax declaration? You may not actually hold ownership–yet

Many property owners in the Philippines are surprised to learn that having a tax declaration does not make them the legal owner of the land. This confusion has led to countless disputes, financial losses, and complications in transactions.

Let’s clarify the key difference between a tax declaration and a Torrens title–and why it matters to protect your property rights.

A tax declaration is issued by the provincial, city or municipal assessor for real property tax purposes. It identifies the person who declares possession of a property for taxation. 

In the case of Republic of the Philippines v. Dela Paz it is held that tax declarations and receipts are not conclusive evidence of ownership or of the right to possess land when not supported by any other evidence. The fact that the disputed property may have been declared for taxation purposes in the names of the applicants for registration or of their predecessors-in-interest does not necessarily prove ownership. They are merely indicia of a claim of ownership of the property for which such taxes have been paid.

The Supreme Court, nevertheless, espoused in Spouses Llanes v. Republic that: While tax declarations and receipts are not incontrovertible evidence of ownership, they constitute, at least, proof that the holder has a claim of title over the property. Tax declarations are good indicia of possession in the concept of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession. Moreover, while tax declarations and receipts are not conclusive evidence of ownership and do not prove title to the land, nevertheless, when coupled with actual possession–open, continuous, exclusive, and notorious possession of the subject property, in the concept of an owner–they constitute evidence of great weight and can be the basis of a claim of ownership through prescription.

In summary, a tax declaration

• Is not conclusive proof of ownership to property, but serves as proof of declaration of property for taxation purposes

• Can be used as evidence of possession, but not legal title over a property

• When coupled with evidence of open, continuous, exclusive, and notorious possession of the subject property, in the concept of an owner, it may be a basis of a claim of ownership through prescription

On the other hand, a Torrens title is that document issued by the Register of Deeds known as the Original Certificate of Title (OCT) or Transfer Certificate of Title (TCT). A fundamental principle in land registration under the Torrens system is that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Thus, the certificate of title becomes the best proof of ownership of a parcel of land. It is also settled that a Torrens Certificate of title is imprescriptible and binding upon the whole world and such holder is entitled to the possession of the property unless and until it has been nullified by a court of competent jurisdiction.

Although a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein, it is not a conclusive proof of ownership. Why? Because ownership is different from a certificate of title. 

As held in the case of Spouses Yu Hwa Ping and Mary Gaw v. Ayala Land, Inc., the fact that a person was able to secure a title in his name does not operate to vest ownership upon him of the subject land. Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein. It cannot be used to protect a usurper from the true owner; nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner. 

In summary, a Torrens title

• Is the best proof ownership in favor of the person whose name appears therein

• It guarantees the owner’s legal rights to the property, including possession

• It does not protect against claims from the true owner, cannot justify fraudulent actions, and does not preclude the possibility of co-ownership or trust arrangements involving unregistered individuals.

Why This Matters:

Relying on a tax declaration alone can lead to serious risks:

• You may not be able to sell or transfer the property.

• You can be subject to claims from the true titled owner.

• You may lose the property if someone else proves ownership.

If you’ve inherited land or are in possession of a property without a title, it’s important to consult a lawyer to determine your legal options—whether for land registration, reconstitution, or judicial confirmation of ownership.

For any comments or inquiries, feel free to email us at admin@gclawoffice.net.