Add Kentucky homestead property tax exemption

changelog.d/8309.added.md

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+Added the Kentucky Homestead Exemption property tax reduction.

policyengine_us/parameters/gov/states/ky/tax/property/homestead_exemption/age_threshold.yaml

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+description: Kentucky limits age-based eligibility to filers at or above this age under the Homestead Exemption program.
+values:
+  2025-01-01: 65
+metadata:
+  unit: year
+  period: year
+  label: Kentucky homestead exemption age threshold
+  reference:
+    - title: Kentucky Department of Revenue | Homestead Exemption
+      href: https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/pages/homestead-exemption.aspx

policyengine_us/parameters/gov/states/ky/tax/property/homestead_exemption/amount.yaml

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+description: Kentucky provides this amount as a homestead exemption under the Homestead Exemption program.
+values:
+  1972-01-01: 6_500
+  1975-01-01: 7_700
+  1977-01-01: 8_900
+  1979-01-01: 10_200
+  1981-01-01: 12_900
+  1983-01-01: 15_000
+  1985-01-01: 16_100
+  1987-01-01: 17_100
+  1989-01-01: 18_400
+  1991-01-01: 20_300
+  1993-01-01: 21_800
+  1995-01-01: 23_100
+  1997-01-01: 24_400
+  1999-01-01: 25_400
+  2001-01-01: 26_800
+  2003-01-01: 28_000
+  2005-01-01: 29_400
+  2007-01-01: 31_400
+  2009-01-01: 33_700
+  2011-01-01: 34_000
+  2013-01-01: 36_000
+  2015-01-01: 36_900
+  2017-01-01: 37_600
+  2019-01-01: 39_300
+  2021-01-01: 40_500
+  2023-01-01: 46_350
+  2025-01-01: 49_100
+metadata:
+  unit: currency-USD
+  period: year
+  label: Kentucky homestead exemption amount
+  reference:
+    - title: Kentucky Department of Revenue | Homestead Exemption
+      href: https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/pages/homestead-exemption.aspx
+    - title: Kentucky Department of Revenue | Homestead Exemption Historical Data
+      href: https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/Pages/HomesteadExemptionHistoricalData.aspx
+    - title: Kentucky Department of Revenue | DOR Sets 2025-2026 Homestead Exemption
+      href: https://revenue.ky.gov/News/Pages/DOR-Sets-2025-2026-Homestead-Exemption.aspx

policyengine_us/tests/policy/baseline/gov/states/ky/tax/property/homestead_exemption/ky_homestead_exemption.yaml

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+- name: Case 1, exemption is capped at the statutory amount.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption: 49_100
+
+- name: Case 2, exemption is limited to assessed property value.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 40_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption: 40_000
+
+- name: Case 3, historical exemption amount applies in 2024.
+  absolute_error_margin: 0.01
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption: 46_350
+
+- name: Case 4, exemption only uses qualifying owner property.
+  absolute_error_margin: 0.01
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+        assessed_property_value: 40_000
+      person2:
+        age: 30
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+        is_tax_unit_dependent: true
+        assessed_property_value: 100_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: KY
+  output:
+    ky_homestead_exemption: 40_000

policyengine_us/tests/policy/baseline/gov/states/ky/tax/property/homestead_exemption/ky_homestead_exemption_eligible.yaml

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+- name: Case 1, senior homeowner is eligible.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption_eligible: true
+
+- name: Case 2, disabled homeowner under age 65 is eligible.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 40
+        is_disabled: true
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption_eligible: true
+
+- name: Case 3, non-senior homeowner without disability is ineligible.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 64
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption_eligible: false
+
+- name: Case 4, senior without assessed property is ineligible.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_exemption_eligible: false
+
+- name: Case 5, senior head is ineligible when only a dependent owns property.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+        assessed_property_value: 0
+      person2:
+        age: 30
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+        is_tax_unit_dependent: true
+        assessed_property_value: 200_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: KY
+  output:
+    ky_homestead_exemption_eligible: false

policyengine_us/tests/policy/baseline/gov/states/ky/tax/property/homestead_exemption/ky_homestead_property_tax_reduction.yaml

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+- name: Case 1, reduction equals the property tax on the exempt share of value.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 200_000
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_property_tax_reduction: 491
+
+- name: Case 2, reduction cannot exceed property taxes.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        assessed_property_value: 40_000
+        real_estate_taxes: 800
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_property_tax_reduction: 800
+
+- name: Case 3, ineligible filer gets no reduction.
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 64
+        assessed_property_value: 200_000
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: KY
+  output:
+    ky_homestead_property_tax_reduction: 0
+
+- name: Case 4, reduction only uses qualifying owner property taxes.
+  absolute_error_margin: 0.01
+  period: 2025
+  input:
+    people:
+      person1:
+        age: 65
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+        assessed_property_value: 100_000
+        real_estate_taxes: 2_000
+      person2:
+        age: 30
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+        is_tax_unit_dependent: true
+        assessed_property_value: 200_000
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: KY
+  output:
+    ky_homestead_property_tax_reduction: 982

policyengine_us/variables/gov/states/ky/tax/property/homestead_exemption/ky_homestead_exemption.py

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+from policyengine_us.model_api import *
+
+
+class ky_homestead_exemption(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Kentucky homestead exemption"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/pages/homestead-exemption.aspx"
+    defined_for = "ky_homestead_exemption_eligible"
+
+    def formula(tax_unit, period, parameters):
+        person = tax_unit.members
+        p = parameters(period).gov.states.ky.tax.property.homestead_exemption
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        age = person("age", period.this_year)
+        is_disabled = person("is_disabled", period)
+        assessed_property_value = person("assessed_property_value", period)
+        qualifying_owner = (
+            ((age >= p.age_threshold) | is_disabled)
+            & head_or_spouse
+            & (assessed_property_value > 0)
+        )
+
+        return min_(
+            tax_unit.sum(where(qualifying_owner, assessed_property_value, 0)),
+            p.amount,
+        )

policyengine_us/variables/gov/states/ky/tax/property/homestead_exemption/ky_homestead_exemption_eligible.py

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+from policyengine_us.model_api import *
+
+
+class ky_homestead_exemption_eligible(Variable):
+    value_type = bool
+    entity = TaxUnit
+    label = "Eligible for the Kentucky Homestead Exemption"
+    definition_period = YEAR
+    reference = "https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/pages/homestead-exemption.aspx"
+    defined_for = StateCode.KY
+
+    def formula(tax_unit, period, parameters):
+        p = parameters(period).gov.states.ky.tax.property.homestead_exemption
+        person = tax_unit.members
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        age = person("age", period.this_year)
+        # Kentucky requires total disability and disability payments; this is the
+        # closest available person-level proxy.
+        is_disabled = person("is_disabled", period)
+        assessed_property_value = person("assessed_property_value", period)
+
+        return tax_unit.any(
+            ((age >= p.age_threshold) | is_disabled)
+            & head_or_spouse
+            & (assessed_property_value > 0)
+        )

policyengine_us/variables/gov/states/ky/tax/property/homestead_exemption/ky_homestead_property_tax_reduction.py

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+from policyengine_us.model_api import *
+
+
+class ky_homestead_property_tax_reduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Kentucky homestead property tax reduction"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://revenue.ky.gov/Property/Residential-Farm-Commercial-Property/pages/homestead-exemption.aspx"
+    defined_for = "ky_homestead_exemption_eligible"
+
+    def formula(tax_unit, period, parameters):
+        person = tax_unit.members
+        p = parameters(period).gov.states.ky.tax.property.homestead_exemption
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        age = person("age", period.this_year)
+        is_disabled = person("is_disabled", period)
+        assessed_property_value = person("assessed_property_value", period)
+        qualifying_owner = (
+            ((age >= p.age_threshold) | is_disabled)
+            & head_or_spouse
+            & (assessed_property_value > 0)
+        )
+        qualifying_property_value = tax_unit.sum(
+            where(qualifying_owner, assessed_property_value, 0)
+        )
+        qualifying_property_taxes = tax_unit.sum(
+            where(qualifying_owner, person("real_estate_taxes", period), 0)
+        )
+
+        return qualifying_property_taxes * (
+            tax_unit("ky_homestead_exemption", period)
+            / max_(qualifying_property_value, 1)
+        )