TITLE VS. TAX DEC OWNERSHIP

The quick answer: yes. This usually happens when the tax declaration hasn’t been updated to match the title. But it also happens in a less obvious way—when it comes to improvements.

A Common Scenario

A landowner leases a parcel of land to a steel manufacturer. The manufacturer builds a factory.

Question: Who owns the factory during the lease—the landowner or the tenant?

Answer: The tenant. And because the tenant owns the improvement, the tax declaration for the building should be under the tenant’s name, since the tenant is responsible for paying its real property tax.

The Legal Backbone

Civil Code, Art. 415 says “buildings, roads, and constructions of all kinds adhered to the soil” are immovable property (real property).

In Leung Yee v. Strong Machinery Co. (G.R. No. L-11658, Feb. 15, 1918), the Supreme Court ruled that a building is real property distinct from the land on which it stands. Even if it is sold, mortgaged, or declared separately, it remains immovable property—not personal or movable property.

In simple terms, you can’t treat buildings like cars or machines that move with their owner. If the Court had said a building as merely part of the land, it could NEVER be owned separately. By affirming that a building is its own immovable property, the law makes it possible for land and building ownership to split.

So, while the landowner keeps the land’s title and tax dec, the tenant can hold the tax dec for the improvement—and both are perfectly valid.

Why This Matters

For landowners: Leasing out your property doesn’t make you the automatic owner of improvements. That’s why leases often include a clause: when the lease ends, ownership of improvements transfers to the landowner.

For tenants: If you build, you own and declare the building during the lease—and pay taxes on it.

For brokers and buyers: Due diligence means checking not just the title but also the tax declarations—for both land and improvements.

👉 In short: A title proves who owns the land. A tax dec can reveal who owns the building. They don’t always match—and the law allows that.