Beatrice and Eugenie have lived rent-free at Palaces for YEARS

Beatrice and Eugenie have lived rent-free at Palaces for YEARS,

Princesses Beatrice and Eugenie have never personally paid a penny in rent, despite living in exclusive palace properties for nearly two decades.

A report by the National Audit Office has laid bare some of the cosy deals that working – and non-working – royals have benefited from when it comes to residences.

These include Andrew Mountbatten-Windsor’s two daughters, who perform no royal duties, but have been secretly subsidised for years by their grandmother Queen Elizabeth and now by their uncle King Charles.

Both women have their own careers, high-flying husbands and multi-million-pound homes elsewhere and are sure to face questions about why they could not pay their own way.

Other revelations in the report were branded ‘outrageous’ last night. 

Shamed Mr Mountbatten-Windsor, it was disclosed, was allowed to let three properties on his leased Windsor estate – Royal Lodge – to staff and potentially pocket the profits.

And he could be entitled to more than £300,000 in ‘compensation’ from the Crown Estate after being forced out of the Grade II-listed mansion over his friendship with Jeffrey Epstein several years before the end of his 75-year lease.

Questions are also likely to be raised about the late Queen’s cousins, Prince and Princess Michael of Kent, who have also enjoyed a long-term, sovereign-subsidised arrangement on their own lavish Kensington Palace apartment.

Meanwhile, another of the late Queen’s cousins, Princess Alexandra, 89, rents a mansion in scenic Richmond Park, south-west London. 

A trust negotiated a lease on her behalf with the Crown Estate until 2144 – when she would be 207.

The NAO report was prompted by the scandal of Mr Mountbatten-Windsor’s ‘peppercorn rent’ deal for Royal Lodge, one of the last trappings of royal life after he was stripped of his titles and status following revelations about his dealings with paedophile financier Epstein.

While the report is factual and does not seek to examine value for money, it does contain a number of intriguing revelations that are likely to be raked over by MPs in the coming months.

Former Liberal Democrat minister Norman Baker, who has long been a critic of royal finances, said: ‘The whole thing is outrageous. If you look at Andrew, this is adding insult to injury.

‘It shows an absolute total contempt for the taxpayer. The money should have gone to the Crown Estate, not into (his) pockets.’ 

He said of Beatrice and Eugenie: ‘There’s no way that non-working members of the Royal Family should be subsidised by the Duchy of Lancaster. The Royal Family is yet again taking the public for a complete ride.’

The York sisters lived at St James’s Palace from 2008, before Eugenie, now 36, moved to Ivy Cottage in the grounds of Kensington Palace in 2018. She now splits her time between London and a £3.6million Portuguese home. 

Her neighbours are said to include F1 racing drivers and fashion designer Christian Louboutin.

Beatrice, 37, stayed on at the apartment, which she shares with her husband, property developer Edo Mapelli Mozzi, and their family, while also owning a multi-million pound home in the Cotswolds.

Both rents, the report reveals, are paid to the Royal Household entirely by Charles out of the Privy Purse, which is made up of his Duchy of Lancaster income and other private funds. No taxpayer money was involved.

Princess Beatrice and American fashion designer Stacey Bendet attend an event in London last night 

Princess Beatrice of York, Stacey Bendet and Emma Thynn, Marchioness of Bath, smile together at the gathering

However, the homes are situated in occupied royal palaces which are maintained by public funding via the Sovereign Grant – which was effectively reimbursed by the monarch on their behalf.

And for a number of years, their adjusted rents – reduced because the Royal Household properties require tenants with security clearance – were based on out-of-date open market valuations, as were others. 

Some of the properties were dramatically under market value, with the report finding that not even a self-imposed 60 per cent rule was always followed.

Sources said the arrangement for Beatrice and Eugenie was put in place during the reign of Queen Elizabeth, who was very fond of her granddaughters, and the King had agreed to honour it.

They stressed, however, that all financial matters are kept under regular review.

Mr Mountbatten-Windsor, sources have also insisted, is highly unlikely to ever see a penny of his potential compensation, because the cost of repairs needed on dilapidated Royal Lodge since his eviction would swallow up anything owed to him. 

Any rental from subletting three accompanying cottages to staff was to cover maintenance and running costs only, not to generate a profit for him, it is understood.

But the NAO said these figures had not been disclosed to them, so there is no way of independently verifying this. 

Prince and Princess Michael of Kent – dubbed the ‘Rent-a-Kents’ in their heyday for famously ‘going anywhere for a hot meal’ – benefit from a similar deal, despite a huge public outcry over their living arrangements in the early 2000s.

They were originally gifted the use of Apartment 10 at Kensington Palace as a wedding present in 1978. 

For decades, they paid only a nominal £69 per week (about £3,600 a year) for utilities and maintenance.

When this became public, it was announced they would henceforth pay £120,000-a-year market value for the property, which would be personally covered by Queen Elizabeth until 2010 because they did not undertake official duties and received no taxpayer-funded income. 

What was not disclosed until now is that she subsequently continued the agreement and the King has privately honoured his mother’s commitment to the couple, who are both in their 80s and not in good health.

The NAO has looked at two organisations – The Crown Estate (TCE) and The Royal Household, both of which have arrangements with the Royal Family regarding their homes.

TCE, which manages a £13.4billion portfolio including almost 2,500 properties nationally, is a public corporation that operates independently from government to maintain and enhance property and land assets of behalf of the Crown.

It is required to achieve ‘the best price in the circumstances when letting or selling properties, including those let to members of the Royal Family’.

The Royal Household, meanwhile, directly supports members of the Royal Family and maintains the Occupied Royal Palaces (including Buckingham Palace, St James’s Palace and Kensington Palace) through the Sovereign Grant, the annual pot of funding provided by the UK government to the monarch to cover the expenses of royal duties, staff costs and the maintenance of royal residences.

It manages 255 properties which are lived in by members of the Royal Family, their households and staff, as well as private tenants.

The late Queen’s cousin, Princess Alexandra, 89, rents her home, Thatched House Lodge at Richmond, from the Crown Estate through a trust, which can offer inheritance advantages. 

In 1995, it paid £670,000 for a second lease on the Grade II-listed, six-bedroom property until 2144.

It also pays an annual ground rent of just £1,500 for the unique 17th Century home in a prime part of south-west London, which would be worth tens of millions of pounds if sold. 

Her daughter, Marina Ogilvy, has an assured shorthold tenancy on a three-bed cottage on the Windsor Estate, for which she pays £17,436-a-year rent.

Princesses Eugenie and Beatrice have their own careers, high-flying husbands and multi-million-pound homes elsewhere – and are now certain to face questions about why they could not pay their own way

A Buckingham Palace spokesman said: ‘We are grateful to the National Audit Office for this report, which is in line with The Royal Household’s commitment to transparency.

‘We hope that the findings will help correct, clarify or contextualise a number of points regarding royal properties. 

‘As the report notes, arrangements for properties managed by the Royal Household vary based on a number of factors to ensure residences are filled appropriately, depending on their location, tenants and purpose.’

A spokesman for the Crown Estate said: ‘The Crown Estate welcomes the National Audit Office’s review which confirms its leases with members of the Royal Family were agreed in line with independent, professional advice and open market valuations.’