Can an apartment owner claim the 45L credit for units they build or rebuild and rent out?
Yes, if you were the builder, the units were certified under Energy Star Multifamily New Construction or the Zero Energy Ready Home program, and a tenant leased each unit on or before June 30, 2026. The IRS treats a lease to a tenant as the unit being acquired. The credit is $500 or $1,000 per unit, or $2,500 or $5,000 when prevailing wages were paid, and units first leased after June 30, 2026 get nothing.
You can be the builder even if you hired one
Section 45L is a credit for the "eligible contractor", which the statute defines as the person who constructed the home. That sounds like it belongs to your general contractor, but IRS Notice 2023-65 says otherwise: the eligible contractor is the person that constructed the home and owned and had a basis in it during construction. If you own the building and hire a contractor, you are the eligible contractor and the contractor is not.
The statute also says construction includes substantial reconstruction and rehabilitation. So a gut renovation of an older building, not only a new build, can produce qualifying units, as long as they meet the energy rules below. Ordinary turns and partial updates do not.
Why a lease counts as the sale
The credit applies to a unit "acquired by a person from such eligible contractor for use as a residence during the taxable year." A rental owner never sells the unit, so this used to look like a dead end. Notice 2023-65, section 5.01, settles it: the IRS will consider a qualified home that is leased by a person from an eligible contractor for use as a residence during the taxable year as acquired.
Two consequences follow. The credit belongs to the year each unit is first leased, so a building that leases up across two years claims across two years. And a unit you keep for your own home is not acquired, so it does not earn the credit.
How much per unit
For a unit in a building eligible for Energy Star's Multifamily New Construction program, the statute sets these amounts:
| Certification | Without prevailing wages | With prevailing wages |
|---|---|---|
| Energy Star Multifamily New Construction (national and regional requirements) | $500 per unit | $2,500 per unit |
| DOE Zero Energy Ready Home | $1,000 per unit | $5,000 per unit |
The higher column requires that every laborer and mechanic employed by you or any contractor or subcontractor on the construction was paid at least the local prevailing wage set by the Department of Labor. If you cannot show that for the whole job, use the lower column. The credit also reduces the basis you depreciate, under subsection (e).
The dates that decide it
- January 1, 2023: the current amounts apply to homes acquired after December 31, 2022. Older homes follow the earlier $1,000 and $2,000 rules.
- July 4, 2025: Public Law 119-21 moved the end date in subsection (h) from December 31, 2032 to June 30, 2026.
- June 30, 2026: the last day a unit can be acquired, which for a rental means first leased, and still qualify.
- Your return for the year of each lease: the credit is figured on Form 8908, Energy Efficient Home Credit, as the IRS page notes, and claimed with the return.
The IRS page on the credit states the same window: up to $5,000 for homes acquired in 2023 through June 30, 2026.
A worked lease-up
Example a made-up owner guts and rebuilds a three story, 16 unit building. Every unit is certified under Energy Star Multifamily New Construction, not Zero Energy Ready, and the contractor did not pay prevailing wages. Ten units are leased by June 30, 2026 and six are leased in August 2026. The credit is 10 times $500, or $5,000. The six August units earn nothing because they were acquired after June 30, 2026. If the rebuild cost $1,600,000 for the building, its depreciable basis falls to $1,595,000.
Had the contractor paid prevailing wages on the whole job, the same ten units would have earned 10 times $2,500, or $25,000. That gap is why the payroll records of every subcontractor matter as much as the energy certificate.
Proving the lease dates with DoorKeeping
The lease date decides the credit, and DoorKeeping's e-signed leases carry the date each tenant signed, stored with that unit and that property's LLC. Certificates, contracts and contractor payroll reports can be kept in the property's documents, and the rebuild invoices are coded into its own books. You can ask your AI app which units of a building had a lease signed by June 30, 2026. DoorKeeping does not give tax advice, so the claim itself is your preparer's. It costs $2 per unit per month, with no other fees for owners or tenants.
Sources
- IRS, Credit for builders of energy-efficient homes, read Oct 30, 2026
- 26 U.S.C. 45L, New energy efficient home credit (Cornell LII), read Oct 30, 2026
- IRS Notice 2023-65, Section 45L New Energy Efficient Home Credit, read Oct 30, 2026
Questions
- Does a gut rehab qualify for 45L?
- It can. The statute says construction includes substantial reconstruction and rehabilitation, so rebuilt units that meet the Energy Star Multifamily or Zero Energy Ready requirements can qualify. Light renovations do not.
- Can a landlord claim 45L if the units are rented, not sold?
- Yes. IRS Notice 2023-65 says a home leased from the eligible contractor for use as a residence counts as acquired. The credit falls in the year each unit is leased.
- Is 45L available for units leased after June 30, 2026?
- No. Public Law 119-21 ended the credit for homes acquired after June 30, 2026, and for a rental that means first leased after that date.