HCP Terraform Free Tier in 2026: What Survived the EOL

Is HCP Terraform Still Free in 2026?

Partly. The legacy Free plan ended on March 31, 2026, and per HashiCorp's end-of-life notice, organizations that took no action were "automatically transitioned to the enhanced Free tier." That tier, per HashiCorp's docs as of July 2026, allows 500 managed resources, unlimited users, and one policy set of up to five policies. Whether that works for you comes down to your resource count. The sections below cover the limits, current pricing, and where to go if 500 resources isn't enough.

Is Terraform Itself Free?

Yes. The Terraform CLI is free to download and run, including in production inside your own organization. Since August 2023 it ships under the Business Source License 1.1, which isn't an OSI-approved open-source license but only restricts offering Terraform to third parties in a way that competes with IBM's (formerly HashiCorp's) paid products. What costs money is HCP Terraform, the hosted platform this post covers. If the license change matters to you, OpenTofu is the fork that stayed on the open-source MPL 2.0 license.

Update history. This post tracked the EOL as it unfolded and has been revised in place since. Dec 18, 2025: HashiCorp clarified that only the user-based legacy free plan was being sunset, in favor of the pay-as-you-go plan's built-in 500-resource free tier. Jan 5, 2026: reports surfaced that terraform import had been restricted to higher tiers. Feb 19, 2026: HashiCorp published per-tier pricing (Essentials $0.10, Standard $0.47, Premium $0.99 per resource/month). July 21, 2026: post-EOL pricing and limits were re-verified against the vendors' public pages; IBM publishes one concurrent run for Free and three for Standard, while Essentials and Premium integers remain unpublished; env0 lists a trial but no free plan, and Spacelift's entry paid tier remains $20,000/year.

On December 15, 2025, HashiCorp sent an email to all HCP Terraform Free tier customers with news that caught many off guard: the "legacy HCP Terraform Free plan" would reach end-of-life on March 31, 2026. Here's what was announced, what happened at the deadline, and what your options look like now.

What Did HashiCorp Announce?

HashiCorp's email to Free tier users was brief and direct:

"We're reaching out to let you know that your organization is currently on the legacy HCP Terraform Free plan. This plan will reach end-of-life (EOL) on March 31, 2026. After this date, the plan will no longer be supported. To keep using your organization without interruption, please sign up for a current HCP Terraform plan and migrate your existing organization before March 31, 2026."

The confirmed facts:

• Deadline: March 31, 2026, approximately 3.5 months from the announcement
• Affected users: Anyone on the "legacy" HCP Terraform Free plan (up to 500 managed resources)
• Required action: Migrate to a paid HCP Terraform plan or move to an alternative
• No blog post or press release: The announcement came exclusively via email to affected customers

The discontinued Free tier offered up to 500 managed resources, 1 concurrent run, basic Sentinel/OPA policy enforcement (1 policy set, 1 mandatory policy), and 1 self-hosted agent. For small teams and individual practitioners, it was a workable way to use Terraform Cloud for free.

What Happened to Accounts That Didn't Upgrade?

When the announcement landed, HashiCorp's email raised more questions than it answered. Most have since been resolved:

What happens to accounts that don't upgrade? Answered. The end-of-life notice states that remaining organizations were "automatically transitioned to the enhanced Free tier" on March 31, 2026. Accounts were not locked and workspaces were not deleted. The migration is one-way: there is no path back to legacy plan types.

What happens to state data? State files survived the transition, but the standing warning remains: according to HashiCorp's own documentation, workspace deletion is unrecoverable and results in permanent loss of state files. If your transitioned organization is above the 500-managed-resource cap and you plan to restructure or leave, export state first.

Why "legacy" Free tier? HashiCorp's December 2025 blog post clarified the distinction: the user-based free plan from the pre-2023 pricing model was the "legacy" one; the pay-as-you-go plan's built-in free tier (500 managed resources, unlimited users) is its replacement.

Still unanswered as of July 2026: what exactly happens when a transitioned organization exceeds 500 managed resources. HashiCorp's public pages do not say whether runs are blocked, queued, or billed. If you are near the cap, assume you need a paid plan and verify with HashiCorp support.

Timeline of Continued Restrictions

This announcement didn't come out of nowhere. It's part of a clear pattern of restrictions that has picked up since IBM's acquisition of HashiCorp closed in late 2024:

The pattern is consistent: features that used to be free are getting moved behind paywalls, often with little notice and no public announcement.

If you're deciding where to run your infrastructure, today's HCP Terraform price is only part of the picture. What it'll cost next year, and what'll be restricted by then, matters just as much.

Commercial Alternatives

If you're looking to move off HCP Terraform, several commercial platforms offer Terraform and OpenTofu automation. Here's how they compare across the factors that matter most for migration.

Migration Effort

Moving from HCP Terraform to another platform involves several steps:

1. State migration: Export state from HCP Terraform workspaces (terraform state pull) and configure your new backend
2. VCS reconfiguration: Reconnect repositories and webhook integrations
3. Variable migration: Recreate workspace variables and sensitive values
4. Policy migration: If using Sentinel, you'll need to adapt policies to the new platform's policy engine (OPA is more portable)
5. Team/permission setup: Recreate access controls in the new platform

Platform-specific migration considerations:

Note that all of these include support for OPA policies, OpenTofu, and GitOps.

Most migrations take anywhere from minutes to weeks depending on complexity. The biggest variable is how much you've leaned on Sentinel policies (which aren't portable across platforms), though there are plenty of tools to auto-convert them into OPA.

Cost

This is where the differences get big. HCP Terraform's RUM (Resources Under Management) model charges per resource per hour, which scales non-linearly as your infrastructure grows.

HCP Terraform pricing (re-verified against the pricing page and limits page July 21, 2026):

• Free tier (Pay-As-You-Go): 500 free managed resources, unlimited users
• Essentials: starts at ~$0.10/resource/month ($0.00013/resource/hour)
• Standard: starts at ~$0.47/resource/month ($0.00064/resource/hour)
• Premium: starts at ~$0.99/resource/month ($0.00135/resource/hour)
• Enterprise (self-managed, sold as IBM Terraform Enterprise): custom pricing

The current published concurrency figures are one run for Free and three for Standard. IBM's public pricing and documentation do not publish integers for Essentials or Premium.

Billing is on the peak number of managed resources in a given hour, and partial hours count as full hours, per HashiCorp's cost-estimation docs.

What this means in practice:

Remember: every security group rule, IAM policy, S3 lifecycle configuration counts as a resource. Teams frequently discover their actual resource count is 30-50% higher than expected.

Alternative pricing models:

Pricing models re-verified against each vendor's public pricing page on July 21, 2026. Two changes since this post first ran: env0 removed its perpetual free plan (a free trial is now the only no-cost option), and Spacelift kept its free plan (2 users, 1 public worker) but discontinued its cheap ~$399/month Starter tier. Its entry paid tier is now a $20,000/year annual subscription with unlimited users, 2 public workers, and 1 private worker (a second private worker is available).

If you have large infrastructure but deploy at a moderate pace, per-run or concurrency-based models often cost a lot less than RUM pricing.

The alternatives have trade-offs of their own, too. Concurrency-based pricing (used by some alternatives) sells a fixed number of parallel run slots, which brings its own problems: too few slots and engineers queue during a release, too many and you're paying for idle capacity. The cap also bites hardest during incidents, right when you want to ship a bunch of fixes in parallel. Usage-based, per-run pricing dodges both problems by charging only for runs that actually ran, so there's no slot to mis-provision.

Features to Be Excited About

Moving platforms gives you access to capabilities HCP Terraform doesn't offer:

Scalr

• Drift detection: Built-in and free.
• CLI support: continue using the command-line
• Full GitOps support: Atlantis-style commands via PR comments, apply-before-merge, merge-before-apply, etc.
• No charge for concurrency
• OpenTofu support: Run Terraform or OpenTofu with the same platform

Spacelift

• Multi-IaC support: Terraform, OpenTofu, Pulumi, CloudFormation, Ansible, Kubernetes in one platform
• Drift detection and remediation: Built-in, not a paid add-on
• Stack dependencies: Sophisticated orchestration for complex infrastructure

env0

• Cost visibility: Built-in cost estimation and tracking
• TTL environments: Automatic cleanup of temporary infrastructure
• Approval workflows: Flexible deployment governance

Across all platforms:

• No RUM pricing: None of the major alternatives use per-resource billing
• Better concurrency: More parallel runs out of the box
• OpenTofu compatibility: Hedge against future Terraform restrictions

Self-Hosted and Open Source Alternatives

If you'd rather not depend on another SaaS platform, several self-hosted and open source options exist:

Atlantis

What it is: Open source Terraform pull request automation. Runs plan and apply based on GitHub/GitLab comments. (See our complete guide to Atlantis with Terragrunt for a deeper look.)

Pros:

• Completely free
• GitOps-native workflow
• Full control over execution environment
• Active community

Cons:

• Self-hosted infrastructure required
• No built-in state management (use S3, GCS, etc.)
• Limited governance features compared to commercial platforms
• No UI; everything through PR comments

Best for: Teams comfortable with GitOps, already running Kubernetes or similar infrastructure, and wanting zero vendor lock-in.

OpenTofu + DIY Pipeline

What it is: Run OpenTofu (the open source Terraform fork) in your own CI/CD system with cloud-based state storage.

Typical setup:

• OpenTofu or Terraform CLI in GitHub Actions/GitLab CI/Jenkins
• State stored in S3 + DynamoDB (locking) or equivalent
• Manual implementation of approval workflows

Pros:

• Maximum flexibility and control
• No per-resource or per-run costs
• OpenTofu is fully open source (MPL 2.0)

Cons:

• Significant DIY effort for state locking, secrets management, policy enforcement
• No centralized UI or audit logs without additional tooling
• Maintenance burden falls entirely on your team

Best for: Platform engineering teams with bandwidth to build and maintain internal tooling.

Terramate

What it is: Open source orchestration tool for Terraform/OpenTofu. Handles code generation, stack management, and execution across many directories.

Pros:

• Orchestration layer without replacing your execution environment
• Works with any CI/CD system
• Simplifies monorepo management

Cons:

• Orchestration only; doesn't provide state management, UI, or governance
• Complementary to other solutions rather than a complete replacement

Best for: Teams with complex Terraform monorepos looking for better orchestration without a full platform.

Quick Comparison

---

Why are IaC vendors pulling back free and low-cost tiers?

The HCP Terraform free-tier EOL didn't happen on its own. In the first half of 2026, three of the largest Terraform management vendors pushed the affordable end of the market upward at about the same time. HashiCorp ended its legacy free plan on March 31 and capped the replacement at 500 managed resources. env0 removed its perpetual free plan and now offers a 30-day trial only, with paid plans starting at $1,500/month. Spacelift kept a free plan (still 2 users and 1 public worker, with no time limit) but discontinued the cheap ~$399/month Starter tier it offered earlier in the year, so the first paid step is now a $20,000/year Starter+ subscription. The pattern is consistent: free and low-cost on-ramps are getting narrower, and the jump to the first real paid tier is getting steeper.

What it means for the vendors. Each of these moves points the same direction, toward enterprise revenue and healthier unit economics. Free and cheap tiers are expensive to support and slow to convert, and a market that has matured past its land-grab phase rewards margin over sign-up volume. The trade-off is real: the free tier is where evaluation, learning, and bottom-of-funnel adoption happen. A vendor that prices out small teams and individual practitioners also gives up the mindshare those users carry into their next, larger job.

What it means for the community. Small teams, individual practitioners, students, and open-source maintainers feel this first. The managed on-ramp that used to cost nothing, or a few hundred dollars a month, is now either capped tightly or gated behind a five-figure annual commitment. The practical effect is to push that segment toward two ends: genuinely open-source, self-hosted tools such as Atlantis, OpenTofu with your own CI/CD, Terrakube, or Digger/OpenTaco; and the few managed platforms that still offer a real free or low-cost entry point. The middle ground, a cheap, fully managed plan from a major vendor, is what's thinning out.

Short, medium, and long term (informed speculation, not certainty). In the short term (through 2026), expect migration churn as teams come off ended free tiers and shop for replacements, and aggressive discounting as vendors compete for those in-flight evaluations. Over the medium term (2027–2028), pricing models are likely to keep converging upward while open-source and self-hosted adoption rises to fill the low end, and any vendor that holds a credible free tier gains a recruiting advantage for developer attention. Long term, the category may split into enterprise-grade managed SaaS on one side and DIY open-source on the other, with OpenTofu as the standardization layer that keeps switching costs lower than they were in the proprietary-Terraform era. These are projections from the current direction of travel, not announced plans.

A fair caveat, including about us. None of this makes the vendors wrong. Sustaining a free product on cloud infrastructure has a real cost, and pricing that reflects it is a legitimate business choice, and it applies to Scalr too. Our free tier is 50 runs per month, not unlimited, and features such as audit log export, SCIM, and bring-your-own state storage sit on our Enterprise plan. The takeaway is narrower than vendor-bashing: the affordable, fully managed segment of the IaC market is smaller than it was a year ago, so it's worth re-checking where each platform draws its free-to-paid line before you commit. For a current side-by-side, see our guides to choosing a Terraform Cloud alternative and evaluating IaC platform pricing models.

---

What Should You Do Now?

If your organization was transitioned to the pay-as-you-go free tier and you're approaching the 500-managed-resource cap, run one of the many scripts that estimate your costs on an HCP paid plan, then book a demo with any of the alternatives or get a quote to compare costs.

---

Have questions about migrating from HCP Terraform? We're happy to help. Reach out to our team or check out our migration guide.