Matthew – I think we can all rely on Missy’s post (#2), where as a Tax Accountant she clearly explains your original queries.
As for the subject of levies being income, as a non-accountant I’ll have a go at explaining that, as they (i.e. levies) are payments made for the procurement of services by the Owners Corporation, they represent income in the hands of the O/C, and if the annual total of levies and other income then exceeds the threshold for the Goods and Services Tax (GST), then the O/C needs to Register for the GST.
The O/C’s liability for Business Income Tax by the ATO is however determined differently, under the “principle of mutuality”, which to quote the ATO (with my emphases in brackets)…. “is based on the proposition that an organisation cannot derive income from itself, so where a number of persons (i.e. Owners) contribute to a common fund (i.e. Admin & Sinking) created and controlled by them for a common purpose (i.e. the management of the Strata Plan), any surplus arising from the use of that fund for the common purpose is not income.”
But… income by an O/C from sources other than levies, such as interest and the leasing of common property is, as Boronia mentioned, assessable as business income (30%) and a Taxation Return needs to be lodged; interestingly using THIS 2 page Form just for Strata Plans – so simple really and hardly worth the $450 that our past Strata Managers used to charge us (back in 2006) to complete and lodge a normal Business Taxation Return!