California Governor Arnold Schwarzenegger extended a bill putting the state’s vacant homes on sale, boosting up new constructions and thereby broadening the state tax credit for first-time purchasers to $10,000.

The bill was passed by the state Legislature, earlier this week. The state tax credit which is applicable for first-time homebuyers will be enforced from May 1 and will continue till the end of 2010.

The bill will allow the homebuyers to claim 5% on the purchase prices against their California taxes.

"I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy", said Schwarzenegger.

As a part of his job-creation initiative, in the beginning of this year, Schwarzenegger had approached the lawmakers to expand the tax credit. At 12.5%, California has the unemployment rate of 12.5% which comes out to be the fifth highest in the country. 

Through a similar tax break, the State Government had bagged a tax credit obtainable at $100 million on the purchase of new homes, last year.