Homebuyer tax credit bill gets Schwarzenegger's signature

Gov. Arnold Schwarzenegger on Thursday signed a bill aimed at selling California’s vacant homes and encouraging new construction by extending a $10,000 state tax credit for first-time homebuyers.

The governor signed a bill the state Legislature passed on a bipartisan vote earlier this week. It provides a state tax credit to first-time homebuyers who buy new or existing homes from May 1 until the end of 2010.

Homebuyers can claim 5 percent of the purchase price against their California taxes, or up to $10,000.

Earlier this year, Schwarzenegger called on lawmakers to extend the homebuyer’s tax credit as part of his job-creation initiative. At 12.5 percent, California has the fifth highest unemployment rate in the nation.

The state passed a similar tax break last year that capped the total credit available at $100 million on new homes bought through February.

The new bill makes another $100 million available for buyers of new homes and $100 million for those who buy existing homes.

The governor said the expanded tax credit will help cities and counties get more properties back on the tax roll and put more people to work.