Prince Harry and Meghan Markle may have to consider selling their Montecito estate following reports of a dramatic return to the UK, property experts have suggested.
The Duke and Duchess of Sussex, who quit frontline royal life and relocated to California in 2020, are expected to be back in Britain within days.
In what would mark a striking reversal after Megxit, the couple are understood to be moving into a private, non-royal home outside London, while Prince Archie, seven, and Princess Lilibet, five, are reportedly set to attend a British school.
However, there are said to be no current plans for either Harry or Meghan to return as working members of the Royal Family, meaning they would continue to live as private, “financially independent” individuals.
Their expected departure from the US has prompted fresh scrutiny over the future of their $14.65million mansion in the exclusive California enclave of Montecito. The Sussexes also retain ownership of a £6.3million villa on Portugal’s picturesque Melides coast.
Harry and Meghan purchased their expansive nine-bedroom Montecito property from Russian businessman Sergey Grishin on June 18, 2020.
The 14,563-square-foot residence, known as “The Chateau,” is set across 5.4 acres and features a swimming pool, tennis court and manicured gardens.
A Santa Barbara real estate source told the New York Post that there “have been rumblings” the couple could put the home on the market. According to the outlet, the property carries mortgage and tax costs of more than $650,000 a year.
The Daily Mail previously reported that Harry and Meghan bought the luxury property after securing a $9.5million mortgage, implying that they made a down-payment of more than $5million.
Prince Harry and Meghan Markle may be forced to sell their Montecito mansion after announcing their sensational return to the UK
Harry and Meghan bought their sprawling nine-bedroom home in Montecito from Russian tycoon Sergey Grishin on June 18, 2020
The home was built in 2003. The estate has sweeping lawns, tiered rose gardens, tall Italian cypress trees, blooming lavender, century old olive trees, a tennis court, tea house, children’s cottage and a pool
At typical interest rates, the couple would likely be paying around $40,000 a month or $480,000 a year in order to repay the mortgage on a standard 30-year term.
County tax history obtained by The Post shows that the bill has increased every year the Sussexes have lived there, from $138,629 to $141,645, then $144,229, $146,930 before this year’s $149,668.
That means Harry and Meghan have spent around $721,000 in property taxes alone.
Adding insurance and maintenance of the grounds, the couple are said to be spending more than $650,000 a year before taking into account the cost of security.
The Mail previously reported that the Sussexes had hired $9,000-a-day security firm GDBA to protect them in Los Angeles.
If GDBA were hired for 365 days a year at that rate, Harry and Meghan would be left with a $3.3million bill for security alone.
‘I cannot imagine ever wanting to let go of this beautiful piece of property, but hanging onto it comes at a steep cost, so they might have to,’ a source told the Post.
‘It likely will be a few months before they list, or maybe they will give the UK a year first to see how that plays out,’ the source added. ‘But if they do decide to plant roots in the UK, I don’t see a world where they will keep this home.’
When Harry and Meghan stepped down as working royals, they became ‘members of the Royal Family with financial independence’.
Before doing so, 95 per cent of their income was generated through the Duchy of Cornwall, with the other 5 per cent covered by the Sovereign Grant. They are no longer entitled to this and they must fund their security themselves.
The Sussexes and other high-profile claimants also face paying millions towards the legal costs of Our News Outlet publisher Associated Newspapers after they lost their doomed phone hacking case.
Associated said its costs are around £34million.
Leading luxury real estate broker Jason Streatfield has estimated that Harry and Meghan could list the mansion for as much as $75million.
He said there have been three sales in Montecito above $50million this year.
When the Sussexes bought it for $14.75million in 2020, it had been on the market for five years at an original listing of $34.5million.
After getting a cut-price deal on it, they could now rake in millions, according to Mr Streatfield. He expects it to be sold for somewhere between $65 and $75million.
The house has nine bedrooms, 16 bathrooms and sits on 5.4 acres of land with immaculately clipped hedges bordering the estate’s stone-pillared entry gates.
Property listings say the home took nearly five years to build and included a library, office, spa with a separate dry and wet sauna, a gym with a stripper pole, game room, arcade, theater, wine cellar and five-car garage.
The estate has sweeping lawns, tiered rose gardens, tall Italian cypress trees, blooming lavender, century-old olive trees, a tennis court, tea house, children’s cottage and a pool. It also boasts a two-bedroom, two-bath guest house.
Since becoming ‘financially independent’ from the Royal Family, Harry and Meghan have tried multiple ways of forging their own brands and income.
In 2020, they signed a reported $100million deal with Netflix through their Archewell brand. This included With Love, Meghan, the lifestyle series where the Duchess of Sussex cooked with her celebrity friends.
Meghan also launched her Archetypes podcast with Spotify, but their $20million deal ended on bad terms when the royal couple were called f***ing grifters’ by an executive at the streaming service.
Harry, meanwhile, signed a major book deal for his memoir Spare, where he sparked a major backlash for revealing explosive details about his family, and Meghan continues to sell jams and other lifestyle products through her As Ever brand.
Tom Garcia-Bridgeman, a PR consultant at Rhizome Media Group, told Our News Outlet: ‘The book deals, Netflix documentaries and product launches were supposed to establish the couple as a global brand independent of the royals, but their return to the UK may suggest that approach hasn’t worked, or at least a rethink has happened.
‘The American dream promised an opportunity to forge an entirely new identity outside the Royal Family, yet years later it is still their connection to the monarchy that generates the greatest global interest.
‘Meghan still needs to use her Duchess of Sussex branding to sell blackberry jam and candles.’
He added: ‘The biggest PR risk is appearing to want the benefits of royalty without the sacrifices. If they lean on royal associations heavily while remaining commercially independent, critics will revive the ‘half-in, half-out’ argument.
With Harry and Meghan’s finances under scrutiny, tax experts have weighed into the timing of their move back to the UK.
Nimesh Shah, CEO of Blick Rothenberg, said: ‘Good to see Harry and Meghan achieve 6 full tax years of non-UK residency to manage the ‘temporary non-resident’ rules for capital gains tax. They have clearly had some good tax advice and the timing of their move back to the UK is immaculate.’
Dhana Sabanathan, a leading partner at law firm Michelmores, added that ‘staying away a bit longer would have given them a much better tax result’.
‘If they had remained non-UK tax resident for 10 consecutive tax years before returning, they could have enjoyed relief on their non-UK income and gains for the first four years of their return. Staying away for 10 years could have also enabled Harry to protect his non-UK assets from inheritance tax.
‘The pattern we are seeing are expats who have been long term in the US, raised families, and established successful businesses there, relishing the opportunity to return or spend more time in the UK without bearing the full brunt of UK tax on their worldwide assets for a period of time.
‘US citizens remain subject to subject to worldwide US taxation even when they leave the US. There have been no public reports of Harry obtaining US citizenship, so his tax affairs are likely to be simpler than Meghan’s on his return.’
Prince Harry speaks at a roundtable event about support for veterans in Washington last night
Harry chats with fellow red-haired veteran William Bringer at last night’s event in Washington
The Duke of Sussex in Washington yesterday during discussions about supporting veterans
Harry in Washington yesterday with Sarah Verado from non-profit The Independence Fund
It comes as it emerged King Charles was only told by his son on Sunday that he plans to move back to the UK later this month, while the Prince and Princess of Wales have also been informed.
It is understood that while he ‘welcomes’ the chance to see Harry and his family in a private and personal capacity, the King is clear that there will be ‘no alteration’ to the Duke and Duchess’s role and status as private individuals and non-working members of the Royal Family in keeping with their ‘clearly expressed wishes and agreement over past years’.
Sources insist, however, it is not in the Sussexes’ ‘plan’ to return to the royal fold. The Mail also understands that no mention of the family’s return was raised or discussed when Harry, Meghan and their children met with the King at Highgrove earlier this summer.
Last night Harry was pictured broadly smiling at a roundtable event in Washington discussing increased support for veterans.
Harry was already scheduled to visit Britain to attend a WellChild Awards event next month and was set to stay in a room at Buckingham Palace.
But the Duke, 41, and Duchess, 45, no longer require accommodation for their stay with the whole family believed to be returning for an extended period within the next two weeks.
Archie and Lilibet will be enrolling at a school in September but it is not yet known whether the move will be a permanent one. The location of Harry and Meghan’s new home has not been revealed for privacy reasons.
Harry and Meghan’s representatives have been approached for comment.
