Buckingham Palace has reached an agreement for Harry and Meghan to pay no more rent while living at Frogmore Cottage after the couple repaid £2.4m of taxpayers’ money used on its redevelopment.
The Duke and Duchess of Sussex have reached an agreement with Buckingham Palace to stop paying rent for Frogmore Cottage after repaying the £2.4m taxpayers paid for its refurbishment, The Mail on has revealed. Sunday.
It had been reported that the Sussexes would pay a “commercial fee” for the five-bedroom mansion on the Windsor estate. But Palace officials confirmed last night that the lump sum payment removed the couple’s rent obligations, as the property’s increased value after work was taken as ‘rent in lieu’.
The property is estimated to cost between £150,000 and £230,000 a year to rent, meaning the Sussexes may have saved up to £690,000. They will not be renewing their lease when it ends at the end of this month.
A Palace spokesperson said: “The Duke and Duchess of Sussex made a contribution of £2.4 million to the Sovereign Grant which covered the redevelopment of Frogmore Cottage. They have met their financial obligations in relation to the property.
‘In accordance with standard practice for Sovereign Grant reporting, the accounting treatment was reviewed and approved by the National Audit Office and the Treasury. As with any such agreement between landlord and tenant, further details about the Sussexes’ tenancy arrangements would be a private matter.
It was reported that the Sussexes would pay a “commercial fee” for the five-bedroom mansion on the Windsor estate (pictured)
The Sussexes may have saved up to £690,000 by not paying the full rent for Frogmore
The couple is shown here in the kitchen of Frogmore Cottage
But last night a critic reacted angrily to the emergence of the deal.
Norman Baker, a former cabinet minister and privy counsellor, said: “It is outrageous that Harry and Meghan can live in a huge house on these terms while normal people struggle to put food on the table.” He now demands to know how many royal family properties are rented below market value.
Buckingham Palace announced in November 2019 that the Sussexes would have Frogmore Cottage as their official residence. They moved in the following spring after renovation work transformed it from a series of separate cottages into a large family home.
But when they stepped back from royal duties to become ‘financially independent’, Buckingham Palace released a statement saying it was Harry and Meghan’s ‘desire to pay Sovereign Grant expenses for the redevelopment of Frogmore Cottage, which will remain their family home in the UK’.
They officially stepped down from royal duties in March 2020 and a Palace spokesperson told the BBC they would continue to pay a “commercial rate” of rent on the property.
In fact, they paid five months’ rent but then gave a lump sum of £2.4m in September to cover renovation costs. Today we can reveal that an agreement was reached in which the payment eliminated any other financial obligations.
It was not an agreement publicly announced by Palacio. It was also not easy to see when looking at the official Sovereign Grant reports describing government spending in the monarchy. Last night Buckingham Palace confirmed that the £2.4 million was split into three headers and recorded in two sets of accounts. In the 2020/21 figures, the lump sum is listed as “rental income” and as “feature top-ups and other income”.
The following year, the third and final part of the lump sum was shown in the accounts as ‘deferred income from current liabilities’.
A senior accountant, who asked not to be named, scrutinized the accounts for The Mail on Sunday.
Meghan appears in the Netflix documentary episode in which the couple moved into Frogmore Cottage before they had Archie.
Harry and Meghan pictured with baby Archie and his grandmother Doria
He said: ‘This is an accountant’s way of balancing the books. They’ll look at this agreement and say ‘Yes, but you’re still getting value out of the lease.’ Therefore, there must be value seen in the accounts. By allowing the Sussexes to remain at Frogmore Cottage without any further payment, the Crown gave value and as such should be recognized. They use part of the £2.4 million for that.
“That’s why they will have split the payments, to show the value that comes back to the property based on the rental agreement the Sussexes will have signed.”
The Royal Family is financed with public money from the Government known as a Sovereign Grant. The system was launched in April 2012 to replace the old Civil Registry and obliges the Royal House to publish a complete report on its public finances each year. Like other government spending, it is subject to scrutiny by the National Audit Office and the Public Accounts Committee.
The Royal House has said it is “committed to making royal finances as transparent as possible.”