According to the principle of anticipation, what defines value?

The principle of anticipation states that the value of a property is primarily determined by the present worth of the benefits one expects to receive from owning that property in the future. This concept emphasizes that potential future income or utility drives value today. For example, if a property is expected to generate rental income or appreciate in value, that expected return influences what buyers are willing to pay today.

The other options, while related to property value, do not align with the principle of anticipation. The value assigned by the government can reflect different factors, such as assessment methods or policies, but it does not directly take into account anticipated future benefits. Historical prices can provide context for a property’s valuation but do not factor in future expectations. Costs incurred to purchase property may influence a buyer’s decision but do not define value according to the principle of anticipation, which looks forward rather than backward.