Why It’s Cheaper to Purchase Lot Property With Tax Declaration Only?

​Is It True Buying Property With No Title, Only Tax Declaration More Affordable?

A Certificate of Title is normally used as proof of ownership of a property such as a parcel of land. The Supreme Court says that it’s the best evidence of ownership, and must be secured when buying or selling properties in the Philippines. However, many properties nowadays only have tax declaration instead of a land title. So, is it safe to buy such properties and why are they cheaper than those with a clean title?

Buying a Property Without a Title

When purchasing a property such as a condo unit, land property, or house and lot in a subdivision with only tax declaration, it’s important to be aware of any potential problem that may arise. According to Philippine property laws, tax declarations are not conclusive proof of possession. In fact, tax receipts are only prima facie evidences of ownership of a property.
While tax declarations show that property taxes are paid, it still better to ask for a copy of the title. If there’s none, you need to be more careful in transacting with the seller. Make sure you personally know the person who claims to be the owner of the property you want to buy. You should be able to easily contact the person in case you run into a problem in the future.

Could Tax Declaration Be Enough?

There can be some good points to say that a property with only tax declaration can still be a good investment. Tax declaration holds a probative value when it comes to land registration proceedings. It may not be enough proof of ownership, but it can be a sufficient basis to infer possession of a property.
The fact that the seller has a voluntary declaration of his property for taxation means the person is sincere in obtaining title to that property. In addition, his intention could be to contribute taxes to the Philippine government. This act makes the one holding tax receipts responsible and therefore have a genuine claim of possession or ownership to the said property.

Final Thoughts

Now, why do they say that it’s more affordable to buy a property with only tax declaration? Apparently, you still need to spend a lot of money to process the title of the property in the Registry of Deeds and LRA. Oftentimes, the buyer and seller would agree to a much cheaper price as long as the buyer would shoulder the costs of processing the title transfer. Makes sense when you understand how expensive it is nowadays to obtain a title for unregistered properties.
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