St. Paul town council has given first reading to its 2026 tax rate bylaw, proposing a modest increase to local property taxes while also opening discussion on how to deal with long-standing vacant lots in the community.

The draft bylaw includes a one per cent increase to the municipal mill rate. If approved, the residential rate would rise to 10.1774 per $1,000 of assessment, with the non-residential rate increasing to 19.8483.

Council also reviewed a proposed change to late payment penalties. Instead of a single 10 per cent penalty applied on July 1, administration is recommending a split structure — five per cent applied in July and another five per cent in August if taxes remain unpaid.

The change is intended to give residents a short window of flexibility without removing consequences for overdue taxes.

While reviewing the bylaw, council shifted into a broader discussion around vacant properties — particularly lots that have remained undeveloped for years while paying minimal taxes.

Members of council raised concerns that the current system provides little incentive for owners to build or sell, allowing properties to sit idle long-term.

One option being considered is introducing a minimum property tax on vacant lots, potentially around $500 annually, to encourage development or turnover.

Administration confirmed that similar approaches are used in other municipalities but said more local data is needed before any decision is made.

Council directed administration to gather information on how many properties would be affected and what the financial impact could be before bringing the idea back for further discussion.

The tax rate bylaw will return to council for additional readings at a future meeting.