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I'm preparing to do my taxes for the first full year after migrating from New Zealand to Canada, and am now a tax resident of Canada. The countries do have a double taxation agreement in place (https://www.fin.gc.ca/treaties-conventions/newzealand-nouvellezelande-eng.asp) - however I am unsure how to interpret some of the wording.

e.g. Article 6.1:

Income derived by a resident of a Contracting State from immovable property (including income from agriculture, forestry or fishing) situated in the other Contracting State may be taxed in that other State.

Should I be interpreting this as:

  1. Income derived in the other Contracting State may be only taxed in that other State.

or

  1. Income derived in the other Contracting state may be also taxed in that other State.

I understand that either way I must declare the income on my Canadian tax return, I am just unsure whether I can then claim the exemption under line 256 as Exempt Foreign Income.

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