A Welsh Government bid to tackle tax avoidance by some retail and industrial landlords will move ahead - but implementation will be delayed by a year.
In Wales, owners of empty non-domestic properties are not liable to pay rates for the first three months after a property becomes empty – or six months for industrial units.
After the end of this period, the owner must pay full rates indefinitely.
But if at any time the property is occupied for a temporary period of 42 days or more where full rates are paid by the occupier, this acts as a reset to the relief cycle arrangements.
Welsh Government said abuse of the 42-day rule has become the most common and widely known method of non-domestic rates avoidance, where periods of artificial or contrived “occupation” are staged.
They started a consultation last year on a proposal to increase the period a site is occupied before a rates relief reset from 42 days to six months.
Fears were raised that the changes will further reduce investor appetite for commercial property in Wales which in turn will reduce rents and capital values.
Concerns were also raised about the impact on new businesses and the length of time it takes to let a property.
There were calls to delay changes in light of the impact of the Covid pandemic.
Welsh Government concluded: "In light of current circumstances, and the evidence provided in response to the consultation, the Welsh Government is of the view that we should proceed with our intentions to tackle avoidance of empty property rates but delay implementation until 1 April 2022, a year later than proposed in the consultation.
"This will allow businesses and other ratepayers adequate time to prepare for the changes and for us to monitor the impact of Covid-19 on local property markets.
"We remain committed to supporting businesses through the pandemic and any pressures which may arise from exiting the European Union.
"However, we also remain committed to reducing instances of avoidance within the non-domestic rates system.
"The Welsh Government will continue to engage with all partners to ensure the efforts of the considerable majority of businesses who pay their fair share towards the cost of local services are not undermined by the few who exploit the system."
They added: "We also continue to assess longer term options for local taxes in Wales and will shortly be publishing an update of all our research in this area."
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