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.

What Did HashiCorp Announce?

On December 15, 2025, HashiCorp emailed every organization on the "legacy HCP Terraform Free plan" to say it would reach end-of-life on March 31, 2026, about three and a half months out, and that they should move to a current plan before then. There was no blog post or press release; the announcement went only to affected customers. The discontinued tier had offered up to 500 managed resources, 1 concurrent run, basic Sentinel/OPA enforcement (1 policy set, 1 mandatory policy), and 1 self-hosted agent, which made it a workable free option for small teams and individuals.

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. How to export state from Terraform Cloud shows how to do that from the CLI, the API, or the UI, and lists the data you can't get back out at all.

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. Hitting a ceiling shows up in the CLI before it shows up on the bill, and the two messages it prints mean different things: what "Waiting for 1 run(s) to finish before being queued" actually means.

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:

Scalr has three plans: Free, Business (generous quotas, standard support), and Enterprise (controls over data location, encryption keys, identity, and audit trail, plus dedicated capacity and enterprise contracts). Spacelift's Starter+ includes unlimited users, 2 public workers, and 1 private worker, with a second private worker available. Figures are as of August 2026; how env0 and Spacelift got to these prices is covered in the section on vendors pulling back free tiers below.

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.

What You Gain by Moving

None of the major alternatives bills per resource, all of them run OpenTofu, and all of them give you more concurrency out of the box than the HCP Terraform free tier. Beyond that, each has a different strength:

Blank cells mean the vendor doesn't lead with that capability, not that it's absent; check the vendor's docs for the specifics.

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.) Free, self-hosted, and state stays in your own backend; the trade is that you run it and build the governance around it. 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. Free, self-hosted, and state stays in your own backend; the trade is that you run it and build the governance around it. 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. Free, self-hosted, and state stays in your own backend; the trade is that you run it and build the governance around it. Best for Teams with complex Terraform monorepos looking for better orchestration without a full platform.

Quick Comparison

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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 in favor of a trial. 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.

That pattern held for about half a year, and then one vendor broke it. On August 5, 2026 env0 launched a free-forever tier: 250 runs a month across up to 30 active environments, unlimited users and agents, and what env0 describes as its full Cloud Navigator feature set including drift detection and OIDC SSO, with community support only. Its $1,500/month Cloud Compass tier came off the pricing page at the same time, leaving two quote-based paid tiers above the free one. So the accurate read as of August 2026 is narrower than "everyone is pulling back": HashiCorp and Spacelift raised their floor, env0 lowered its own after having raised it, and the jump from free to the first real paid tier remains steep almost everywhere.

What it means for the vendors. The moves all point toward enterprise revenue. Free and cheap tiers cost money to support and convert slowly, and a market past its land-grab phase rewards margin over sign-ups. The cost is mindshare: the free tier is where people learn a tool, and the practitioner you price out today picks the platform at a bigger company tomorrow.

What it means for the community. Small teams, individuals, students, and open-source maintainers feel it first. The managed on-ramp that cost nothing, or a few hundred dollars a month, is now tightly capped or behind a five-figure annual commitment, which pushes that segment toward self-hosted tools (Atlantis, OpenTofu in your own CI, Terrakube, Digger/OpenTaco) or the few managed platforms that still have a real free tier. The cheap, fully managed middle is what's thinning out.

Where this goes next is a guess, so here's ours in two lines. Through 2026, expect a lot of teams shopping at once and vendors discounting to catch them. After that, the cheap managed middle probably keeps thinning: enterprise SaaS on one side, self-hosted OpenTofu on the other, and whoever still has a real free tier gets the developers who'll pick the platform at their next job.

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.

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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.

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

Update history. This post tracked the EOL as it unfolded and has been revised in place. 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 listed a trial but no free plan, and Spacelift's entry paid tier remains $20,000/year. Aug 9, 2026: env0 launched a free-forever tier on August 5, reversing its own free-plan removal, and its $1,500/month Cloud Compass tier no longer appears on its pricing page.