In the Philippine real estate market, it is common to encounter properties offered for sale that do not have a Transfer Certificate of Title (TCT) or an Original Certificate of Title (OCT). Instead, the seller presents a Tax Declaration.

While these properties are often priced more attractively, they carry significant legal risks. In the Philippines, a Tax Declaration is not conclusive evidence of ownership; it is merely proof that the possessor is paying taxes on the property.

1. Understanding the Legal Nature of a Tax Declaration

Under Philippine law, specifically through various Supreme Court rulings, a Tax Declaration is considered an "indicia" of possession, but not a "Torrens Title."

Ownership vs. Possession: A title is a primary piece of evidence of ownership protected by the state. A Tax Declaration merely shows a claim of ownership or possession for taxation purposes.
The "Clean Slate" Rule: Unlike a titled property, which is generally free from all liens and encumbrances not noted on the title, a tax-declared land can be subject to multiple overlapping claims that are not recorded in a single office.

2. Significant Risks of Buying Tax-Declared Land

Buying land without a title is akin to buying a "right" rather than the land itself. The risks include:

Double Sales: Since there is no centralized registry (like the Registry of Deeds) for tax declarations that prevents multiple sales, a dishonest seller could "sell" the same rights to several people.
Overlapping Claims: The boundaries in a Tax Declaration are often based on descriptions like "North: Property of Juan Dela Cruz," which can be vague and lead to boundary disputes.
Government Reclassification: The land might be part of the public forest, a watershed, or inalienable public land. If the land is not "alienable and disposable" (A&D), it can never be titled, and the government can reclaim it without compensation for the land value.
Prior Claims: Heirs of previous owners may emerge claiming they never authorized the sale.

3. Essential Due Diligence Checklist

Before handing over any payment, a buyer must conduct "extraordinary diligence." Do not rely solely on the seller’s word.

A. Verify the Land Classification

Visit the Department of Environment and Natural Resources (DENR) or the CENRO (Community Environment and Natural Resources Office).

Goal: Secure a Certification of Land Classification Status to ensure the land is "Alienable and Disposable." If it is classified as "Forest Land," walk away.

B. Trace the "Chain of Possession"

Request all previous Tax Declarations leading up to the current seller.

Check for gaps in years.
Ensure that the "Tax Declaration of Real Property" (TDRP) is updated and the Real Property Tax (RPT) or "Amilyar" is paid in full.

C. The "History Trail" at the Assessor’s Office

Go to the Municipal or City Assessor’s Office.

Request a Certified True Copy of the Tax Declaration.
Request a Certification of No Improvements (if it's a vacant lot) or a list of existing improvements.
Check the Tax Mapping Division to see if the lot overlaps with any existing titled properties.

D. Physical Inspection and Neighborhood Check

Unlike titled land, possession is 9/10ths of the law here.

Is someone else living on the land?
Ask neighbors: "Who do you know owns this land?" and "Is there a dispute over these borders?"

4. The Process of Titling (Administrative or Judicial)

To secure your investment, you must convert the Tax Declaration into a Torrens Title. This is done through a Land Registration process.

Step 1: Secure a Survey Plan

Hire a licensed Geodetic Engineer to conduct a survey and create a Survey Plan (Psu). This plan must be approved by the LMS (Land Management Services) of the DENR.

Step 2: File for a Patent or Judicial Titling

Depending on the circumstances, you may apply for:

Residential Free Patent: For highly urbanized or residential areas (simplified process under RA 10023).
Agricultural Free Patent: For agricultural lands.
Judicial Titling: Filing a petition in the Regional Trial Court (RTC) for the confirmation of imperfect title.

Step 3: Requirements for Titling

You will generally need to submit:

Deed of Absolute Sale (notarized).
Approved Survey Plan.
CENRO Certification (Alienable and Disposable).
Affidavit of Two Disinterested Persons (witnesses attesting to your or the predecessor's possession for at least 30 years).
Tax Clearance (proof that all taxes are paid).

5. Summary of Key Differences

Feature	Torrens Title (TCT/OCT)	Tax Declaration Only
Legal Weight	Conclusive evidence of ownership.	Proof of possession and tax payment.
Indefeasibility	Cannot be defeated by 3rd parties after 1 year.	Always open to challenge by better claimants.
Bank Collateral	Highly accepted by all banks.	Rarely accepted (only by some rural banks/coops).
Ease of Sale	Fast and standardized.	Difficult; requires heavy due diligence.

Final Note: Buying tax-declared land is a high-risk, high-reward venture. It is highly recommended to consult with a lawyer or a licensed real estate broker specializing in "untitled" lands to verify the authenticity of the documents.

Would you like me to draft a sample Checklist for Land Due Diligence that you can take to the Assessor's Office?