Van Dairy's $20 million stamp duty bill for Woolnorth overturned

The owner of Woolnorth has had a $20 million stamp duty bill overturned.

Xianfeng Lu paid $280 million for the vast north-west dairy in 2016 through Moon Lake Investments Pty Ltd.

The company was renamed Van Dairy Limited when the purchase was finalised, and the Chinese billionaire has since sold off most of the farm.

Van Dairy Limited paid $8.2 million in stamp duty when completing the land acquisition in March 2016.

Before the settlement, Mr Lu transferred shares from Moon Lake to his parent company, Ningbo Kaixin Investment Co Ltd, and then to Van Dairy (Hong Kong) Group Ltd.

During an audit in 2021, Tasmania’s State Revenue Office (SRO) ruled that the share transfers should be treated as property sales because Moon Lake Investments became a land-rich corporation when it signed the initial purchase contract.

Both Mr Lu’s companies were ordered to pay a total of $23.4 million, including $8.2 million in primary stamp duty, a $3.28 million penalty fee, and $3.8 million in interest.

The decision was appealed, and in April 2024 Deputy Chief Magistrate Michael Daly upheld the primary duty assessment, which had risen to $20 million in interest, but he dismissed all the penalties.

Both the SRO and Mr Lu’s investment companies appealed Magistrate Daly’s decision.

The investment companies sought to overturn the stamp duty, and the SRO wanted to reinstate all interest and penalties.

In November 2024, Acting Justice Shane Marshall dismissed both parties' appeals.

But on Wednesday, a Full Court – comprising Chief Justice Chris Shanahan, Justice Michael Brett, and Justice Stephen Estcourt – ruled in favour of Mr Lu’s investment companies and dismissed the cross-appeal from the State Revenue Office.