It is most definitely the second one in your example. Just try not paying your property taxes and you'll find out just how quickly you are just a tenant on the land.
There was a time back before 1933 when a person could own land and have allodial title, which meant it was held without a superior landlord (government). That all changed when the US government went broke and had to steal the land from people to put up as collateral for the debt they owed to the banks. They don't teach that in schools either by the way.