 Rates are a form of tax levied on occupation of landed property.In Hong Kong, the unit of assessment for rating purposes is a “tenement”, defined in the Rating Ordinance as

"“any land (including land covered with water) or any building, structure, or part thereof which is held or occupied as a distinct or separate tenancy or holding or under any licence.”"

The definition of “tenement” was considered in detail by the Lands Tribunal in the rating appeal "Yiu Lian Machinery Repairing Works Ltd & Ors v Commissioner of Rating and Valuation [1982] HKDCLR 32".The Tribunal observed that the definition consists of two limbs, stating that –

(a) “The first limb concerns the subject matter to be rated, namely, land, buildings and structures” and
(b) “The second limb only makes even those three species of property rateable, if they are held or occupied as a distinct or separate tenancy, holding or licence.”

“Occupied” carries its literal meaning of somebody or something physically using or occupying the land.