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As Prince Harry approaches his 40th birthday, news has emerged that he and Meghan Markle are facing a hefty property tax bill for their California mansion, just ahead of a significant inheritance the Duke is poised to receive.
Reports indicate that Harry and Meghan have been hit with a property tax obligation of over £112,000 for their sprawling nine-bedroom, 16-bathroom estate in Montecito, Santa Barbara. This tax is assessed annually by local authorities based on factors like a property's market value.
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This is not the first large tax bill the Sussexes have had to pay for their mansion. In 2021, they settled £77,000 in property taxes to Santa Barbara officials, paid in two installments. The previous year, their tax obligation was an even higher £110,000.
With a growing family and expensive lifestyle in California, these escalating tax payments are no doubt putting pressure on the couple's finances. And the news comes just ahead of Harry's anticipated inheritance on his 40th birthday this Sunday.
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Harry is in line to receive a significant payout from a trust established decades ago by his great-grandmother, Queen Elizabeth The Queen Mother. In 1994, at the age of 94, she created a trust estimated to be worth around £90 million that was designed to benefit her younger great-grandchildren.
The financial arrangement aimed to provide the recipients with tax-free windfalls as they reached certain milestones. The first payout was to arrive on their 21st birthdays, with the second and larger sum gifted at age 40.
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A former palace aide revealed the trust was a thoughtful way for the Queen Mother to pass down a portion of her estate while minimizing tax burdens. It effectively safeguarded some of her legacy for future generations.
While the precise figure Harry stands to inherit remains private, it's widely believed he will receive approximately £7 million as his 40th birthday gift through the trust established by his great-grandmother.
This disbursement is expected to take place shortly after Harry celebrates his impending milestone on June 15th. However, some wonder if the growing tax obligations on his and Meghan's Montecito home could diminish the value of the inheritance he's set to receive.
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With Britain's inheritance tax rates as high as 40% on estates over £325,000, receiving wealth in trust has obvious tax benefits. But the couple's growing property tax bills in California will still require sizable funds each year. Some reports have valued their home, with its lush gardens and swimming pool, at £11 million.
With two young children to support as non-working royals, these tax outgoings are sure to put pressure on the Sussexes’ finances. They will no doubt be hoping Harry’s impending inheritance eases their burden, at least temporarily. But as their tax obligations rise annually, that payout may not stretch as far as initially expected.
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Interestingly, no members of the British royal family are believed to be traveling to join Harry for his birthday celebrations, which will presumably take place in Montecito. The family divide only serves to emphasize how the Sussexes have truly established their new lives across the Atlantic, tax obligations and all.
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As Harry hits this milestone birthday while forging ahead independently with Meghan in America, the sizeable inheritance could provide welcome financial security. But with taxes eating annually into their wealth, prudent management will surely be needed to sustain their lavish California lifestyle in the long run. Only time will tell if the Queen Mother's thoughtful gift fully achieves its aim of benefiting her great-grandson and his family for generations to come.
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