The Duke and Duchess of Sussex agreed a deal not to pay rent on their Windsor home after paying back the money used for its refurbishment.
Prince Harry and his wife Meghan lived in the five-bedroom Frogmore Cottage while still working members of the royal family but when they stepped back from official duties and moved to California, they agreed to refund the £2.4 million taxpayers had spent on refurbishing the abode.
Though it was reported they would pay a "commercial rate" for the property - which would cost an estimated £150,000-£230,000 a year - Buckingham Palace have now confirmed the lump-sum payment they returned wiped out their rental obligations as the money was seen as "rent in lieu".
A spokesperson told the Mail on Sunday newspaper: "The Duke and Duchess of Sussex made a contribution of £2.4 million to the Sovereign Grant which covered the refurbishment of Frogmore Cottage. They have fulfilled their financial obligations in relation to the property.
"In line with usual practice for the Sovereign Grant report, the accounting treatment was scrutinised and signed off by the National Audit Office and the Treasury.
"As with any such agreement between landlord and tenant, further details regarding the Sussexes' tenancy arrangements would be a private matter."
Harry and Meghan - who have children Prince Archie, three, and Princess Lilibet, 21 months, together - moved into the property in spring 2019 after extensive work transformed it from a number of separate properties into one large family home, but when they stepped back from royal duties the following year with plans to be "financially independent", Buckingham Palace released a statement saying it was the couple's "wish to repay Sovereign Grant expenditure for the refurbishment of Frogmore Cottage, which will remain their UK family home" and they later said they would continue to pay a "commercial rate" of rent for the property.
Accounts show they paid five months rent before handing over the £2.4 million lump sum in September to cover the refurbishment costs.
Official reports for the Sovereign Grant - which detail public spending on the royal family - show the money was split into three headings and recorded on two sets of accounts.
The sum is listed as both "rental income" and "recharges for functions and other income" in the 2020/21 figures, and the following year the final part of the money is listed as "deferred income under current liabilities".
Former Cabinet Minister and Privy Counsellor Norman Baker has blasted the deal.
He said: "It is outrageous that Harry and Meghan should be able to live in a huge house on these terms while regular people struggle to put food on the table."