However industry groups have reacted angrily to the decision, with the British Property Federation (BPF) labelling it a "shot in the foot" for the struggling retail industry.
The delay will apply to properties in England, with no announcements yet made on the revaluations in Scotland, Wales and Northern Ireland that are also due in 2015. Northern Ireland has not carried out a valuation exercise on non-domestic property since 2003, as its 2010 revaluation was first postponed for a year and then cancelled.
Business rates are charged on most non-domestic premises including shops, offices, warehouses and factories and form the third biggest outgoing for small businesses after rent and staff costs. Premises are assigned a rateable value by the Valuation Office which is used by the local authority to calculate how much the occupier of that property should pay. Revaluations take place every five years. The next revaluation was due to take place in 2015, with rates based on 2013 property values.
In a statement to Parliament, Communities and Local Government Minister Brandon Lewis said that the UK economy and property market had faced "exceptional changes" since the last valuation exercise, which took place in 2008.
"A revaluation at this point would be likely to result in sharp changes to business rate bills in many parts of the country and in many sectors," he said. "Tax stability is vital to businesses looking to grow and help improve the economy."
As business rates are linked to inflation, the delay would mean no 'real term' increase until 2017, Lewis said. He added that the Government was "committed to maintaining up to date rate bills through regular five yearly valuations", which would resume "once the economy has had a chance to recover fully".
Property law expert and business rates specialist Stuart McCann of Pinsent Masons, the law firm behind Out-Law.com, said that businesses would have "legitimately expected their rates liability to reduce" had the 2015 revaluation gone ahead as planned, as the new rates would have been based on April 2013 rental values.
"Currently, businesses are paying higher rates than reflect present economic conditions and, in some places, this has led to the rates liability exceeding the rent," he said. "This imbalance has been created because the amount paid is based on a valuation that took place in April 2008, prior to the significant drop in rental levels that has occurred in most locations since then. Practically, what this new announcement means for businesses is that they will continue to pay higher rates for longer, which will place an unexpected and additional financial burden on them in continuingly difficult trading conditions."
Industry bodies including the BPF have previously called on the Government to consider changes to the law on business rates or to restore previous reliefs granted to owners of empty buildings as a means of encouraging regeneration in the struggling retail sector.
Before April 2011 empty buildings with a rateable value of less than £18,000 were exempt from business rates until they became occupied again. Additional reliefs, which were stopped in 2008, allowed owners of commercial properties to claim 50% relief on rates after the current three-month 'grace period' had passed while industrial premises, including factories and warehouses, received a permanent exemption.
Suzanne Gill, a property law expert at Pinsent Masons, said that the requirement to pay rates on empty premises was particularly unpopular among businesses, which were increasingly relying on legitimate methods of avoiding the tax such as the so-called '42 day loophole'. If a business makes some use of a property, paying business rates, for six weeks another rate-free period will be triggered when the property is vacated again.
"Business rates depend for their legitimacy on the underlying property values being up to date," Gill said. "The failure of successive governments to revalue domestic premises rates was an important factor in their abolition. Business rates should be revalued so that business pays the correct rate for their particular premises – poor policy decisions like this will only add fuel to the flames of those who call for a radical overhaul of land taxation in the UK."