The Queen approved spending of £2.4 million on the redevelopment of Harry and Meghan's official residence.
The couple moved into Frogmore Cottage in Windsor after the property had extensively remodelled.
As it is the official residence of the Duke and Duchess of Sussex, the money for the refurbishment was met by the Sovereign Grant which pays for the core running of the Royal Family.
Royal aides said the couple paid out of their own pocket for higher spec fixtures and fittings.
Asked if extra spending was for kitchens, bathrooms or floors, officials wouldn't be drawn on the details.
- Watch Chris Ship's analysis of the Annual Report and Accounts released by the Royal Family
The redevelopment work on the house - which Harry and Meghan moved to after setting up their own Household and leaving Kensington Palace - is now "substantially completed" but the accounts department at the palace would not rule out further spending for this financial year.
Frogmore Cottage was built in the mid-1800s and was previously five apartments, before being knocked into one home for Harry, Meghan and their son Archie.
The Queen's finance director, Sir Michael Stevens, who has the title Keeper of the Privy Purse said: "The property had not been subject to work for some years and had already been earmarked for renovation in line with our responsibility to maintain the condition of the occupied Royal Palaces estate."
Sir Michael said: "outdated infrastructure was replaced" and "all fixtures and fittings were paid for by Their Royal Highnesses."
The cost of the work was revealed in the Annual Report and Accounts released by the Royal Family today.
They show the Queen's income from the Sovereign Grant rose to £49.3 million.
An additional £32.9 million was raised towards to the 10 year programme of repair works on Buckingham Palace - known as the reservicing.
Anti-monarchy campaigners have called for a full parliamentary inquiry into royal spending. Republic, which campaigns for the family to be axed, said: "If even one school or hospital is facing cuts we cannot justify spending a penny on the royals.
"Yet with all public services under intense financial pressure we throw £2.4m at a new house for Harry.
"This is corruption being hidden in plain sight."
- Where else did the royals spend cash?
The project of urgent repairs to Buckingham Palace is "on track" and Sir Michael announced the Queen, despite her age, remains "highly active as Head of State", completing 140 engagements around the UK in 2018-19.
The cost of travel for members of the Royal Family was also revealed. The royal train cost £800,000 for the year.
Meghan's trip to Cheshire on the train with the Queen last year was nearly £30,000.
And the Prince of Wales also clocked up a £20,000 bill to travel on the train from London to Port Talbot in South Wales.
But, despite the high cost of some journeys, royal sources insisted the royal train offers value for money when security is taken into account alongside the types of engagements, the accommodation on board and the cost of alternatives like planes or helicopters.
An increase in charter flights for overseas tours contributed to a massive 98% rise in carbon emissions from travel.
It was explained by an increase to five of the number of foreign trips needing charter flights compared to just one in the previous year.
The Household is very sensitive to accusations their travel increases the carbon footprint of the Royal Family, given how passionately Prince Charles and his sons campaign on environmental matters.
There is a carbon reduction, a royal source insisted, "in areas where we have control".
They pointed to a 24% cut in carbon emissions from energy efficiency in royal households and a 28% cut in emissions from vehicles.
The RAF plane which is used for senior royals and the prime minister cost £416,000 for Charles and Camilla's tour of the Caribbean and Cuba in March.
And a trip to the Jordan and Israel by Prince William in the RAF Voyager cost £74,000.
Harry and Meghan paid £81,000 to charter a plane to travel from Australia to Fiji and Tonga last Autumn.
The 'core' Sovereign Grant is raised from 15% of the revenues of the Crown Estate whilst an 'additional' 10% grant is being levied for a decade to pay for the major repairs.
Sir Michael said that the core grant is equal to 74p per person, per year.
Next year's total (the core grant plus the reservicing project) will be £82.4 million.
The Queen receives additional funds, described as 'private income', from the Duchy of Lancaster which is used for costs not paid for by the Sovereign Grant.
It's often referred to using its historical name, 'The Privy Purse' and The Queen pays tax on that money.