The cost approach is based primarily on which principle that suggests an informed buyer will not pay more to build a property than the cost of a similar property with equal utility?

The correct choice is based on the principle of substitution, which posits that an informed buyer will not pay more for a property than it would cost to replace it with a comparable property that provides the same utility. This principle is foundational to the cost approach in real estate valuation, where the value of a property is determined by estimating the cost to construct a similar property at current prices, less depreciation.

By applying the principle of substitution, assessors can derive a property's value by considering current construction costs and adjusting for physical, functional, or economic obsolescence. This ensures that the valuation reflects what buyers are realistically willing to pay based on the costs associated with acquiring or constructing similar properties in the market.

The other options, while relevant in property assessment, do not specifically define the core principle that underlies the cost approach. Anticipation relates to the expected future benefits of ownership, depreciation focuses on the loss of value over time, and cost efficiency pertains more to how well resources are utilized in the valuation process. None of these capture the essence of how the cost approach derives its value through the lens of substitution.