Kamprad, now 86 years old, has decided to offer the French-speaking town of Epalinges in the canton of Lausanne 10 million francs ($10.4 million) to build special accommodation for retirees, newspaper 24 Heures reports.
The Swede, whose flatpack furniture empire has made him one of richest people in the world, is a well-known figure in the town where he has been resident for 36 years.
“Mr Kamprad insisted that the ground and walls should belong to the municipality and not to a foundation," the town's mayor, Maurice Mischler, told the newspaper.
The money will be used mainly to build 20 apartments, with a communal space for entertainment. Rents are to be set at an affordable rate for the new prospective tenants.
“The goal is to focus on people in need,” the mayor told online news site 24 Heures.
Another part of the money will be used to fund a study examining the possibility of building fifty more such apartments.
Kamprad has requested that the apartments be constructed close to a school to facilitate communication across the generations, 24 Heures reported.
According to the newspaper, Kamprad's apparent dislike for the town's previous government explained why he waited until now to make his donation.