Is Terraform free? What changed with HCP Terraform's free tier in 2026

Terraform Cloud pricing changed in 2026. HashiCorp announced in mid-December 2025 that it was discontinuing its legacy free pricing tier. The company retired the legacy, user-based Free plan in HashiCorp Cloud Platform (HCP) Terraform and moved the remaining organizations over to the enhanced Free tier by its March 31, 2026 deadline.

So, is HCP Terraform still free? Is Terraform free to use if you're a small team or a solo developer today, and what alternatives do you have if you're affected?

Is Terraform Cloud free? What changed?

Is Terraform still free? Yes, but that hinges on which Terraform you mean.

• HCP Terraform (Cloud) users on the legacy edition were the ones affected, and any organization that hadn't migrated by March 31, 2026, was moved to the enhanced free tier automatically, which has a 500-resource cap.
• Terraform Community Edition (the CLI) is unaffected by the change and remains free to download and run, for personal projects and for most commercial teams. The CLI has shipped under the Business Source License 1.1 since August 2023, which isn't an OSI-approved open source license. BSL only restricts hosting or embedding Terraform in a product that competes with HashiCorp's own, not ordinary internal commercial use, so it rarely changes anything for a team just running terraform plan and terraform apply against its own infrastructure.

If that license distinction matters to you, OpenTofu is a community fork that stayed on the original MPL 2.0 license.

HCP Terraform, a SaaS solution that was previously known as Terraform Cloud, offers state management, VCS integration, secure variable storage, remote operations, and other enterprise features.

The HashiCorp Terraform Cloud tool still has a free edition, but the older free plan type called Free (Legacy) reached end of life on March 31, 2026, and HashiCorp automatically transitioned the remaining organizations to the enhanced Free tier that was introduced in 2023.

The enhanced Free tier comes with up to 500 managed resources at no charge and unlimited users, so the free tier still supports a real team workflow while shifting the limit from headcount to usage.

HashiCorp calls this Resources Under Management, or RUM, and the RUM pricing model counts resources in an HCP Terraform-managed state file where mode equals managed, starting from the first plan and apply, with null resources excluded.

So is Terraform free? Yes, with new limits that now apply to every organization still on HCP Terraform's free plan.

What the HCP Terraform free tier change means for you

If you were on HCP Terraform's Free (Legacy) plan, you saw an in-product prompt to migrate early, and any organization that ignored it was moved automatically on March 31, 2026. HashiCorp called out that the migration "is not reversible back to older legacy plan types," which is why it read as a bigger pricing model change than a normal upgrade.

For a small team, the enhanced Free tier can be a step up. The older free tier limited organizations to five active members, while the current Free plan covers up to 500 managed resources and includes unlimited users. That change removes a surprisingly painful barrier when you want more people involved in reviews and approvals.

Large teams and larger organizations are likely to encounter two limits first.

The first limit is resources

As infrastructure as code spreads, your state file grows, and the managed resources count grows with it. Once you cross 500 managed resources, you're likely looking at a paid plan and paid tiers where your bill ties directly to usage.

The second limit is concurrency

The HCP Terraform Free plan is limited to one concurrent run. Essentials, the entry paid tier, steps up to three concurrent runs; Standard goes to ten; Premium goes to two hundred. If your workflow runs terraform plan on every pull request, that one-run ceiling on Free can become a daily bottleneck.

Predictability is also a challenge. With a per-resource model, your cost increases as your infrastructure grows, even if you deploy less often.

It's worth noting, though, that the impact depends on how you use Terraform today and what kind of teams you have.

If you mostly use Terraform locally, little has changed. You can keep using the Terraform CLI, keep your state file where you choose, and keep full control by using a self-hosted backend for state management. This approach stays free, but you own and manage access controls, locking, secrets handling, and audits.

If you're already on HCP Terraform's enhanced Free tier, there's nothing you need to do.

Why HashiCorp migrated users to the enhanced Free tier

HashiCorp positioned the enhanced Free tier as its way to keep the entry point free while making the default workflow more secure and more representative of how customers actually use the product.

In the original announcement, HashiCorp highlighted access to security- and governance-oriented capabilities from the start, including SSO, policy as code, run tasks, and agents. Those agents are essentially private workers that let you run remote operations in your own network while keeping the benefits of a Terraform Cloud-style workflow.

The business logic is straightforward: a usage-based model that prices around managed resources ties revenue to the growth of customer infrastructure, which lines up with how many infrastructure platforms monetize, and creates clearer upgrade paths as usage increases rather than relying mainly on per-user seats.

HashiCorp became part of IBM when the acquisition closed in February 2025, and the usage-based model it introduced in 2023 has carried on under IBM ownership, with the legacy free plan retired the following year.

HashiCorp has also continued to expand higher-tier packaging, including an enterprise tier in the form of Terraform Enterprise for self-hosted deployments and Premium for additional governance capabilities on top of the Essentials and Standard plans.

Terraform pricing

Pricing changes over time, so treat this section as accurate as of October 2026, and verify before you buy.

Terraform CLI is free for most users in most commercial settings. HCP Terraform is the cloud offering with a free tier and paid plan options. Terraform Enterprise is the self-hosted version for organizations that need full control, enterprise support, and enterprise features beyond what the SaaS offers.

Plan	Where it runs	Metering	Starting list price	Notes
HCP Terraform Free	Cloud	Up to 500 managed resources included	$0	Unlimited users and one concurrent run, with policy enforcement and cost estimation included. Replaced the Free (Legacy) plan that ended March 31, 2026.
HCP Terraform Essentials	Cloud	Per managed resource	Starting at $0.10 per resource/month	Entry paid tier, three concurrent runs.
HCP Terraform Standard	Cloud	Per managed resource	Starting at $0.47 per resource/month	Ten concurrent runs; adds audit logging and no-code provisioning.
HCP Terraform Premium	Cloud	Per managed resource	Starting at $0.99 per resource/month	200 concurrent runs; adds further governance and self-service capabilities on top of Standard.
Terraform Enterprise	Self-managed	Contract	Custom pricing	Self-hosted installation with premium support included.
HCP Terraform Europe	Cloud	Contract	Custom pricing	Geographic service locality option for Europe.

If you're trying to estimate cost, focus first on managed resources, as that is what the cloud pricing is based on. Then, look at plan limits like concurrency and the advanced features you need. HashiCorp’s pricing page lists an hourly per-resource rate for each paid tier.

• Essentials is rated at $0.00013 per resource per hour
• Standard is rated hourly at $0.00064 per resource per hour
• Premium is rated hourly at $0.00135 per resource per hour

No-code provisioning is another feature that can push teams toward paid plans, especially when you're building internal platform workflows for non-infrastructure engineers. It ships from the Standard plan up, enabling users to deploy pre-built modules without writing Terraform configuration.

The benefits of using Stategraph

If you like Terraform's workflow but want a different relationship between your infrastructure and its cost, Stategraph is worth a look.

Stategraph comes in two parts that work together or on their own:

1. Stategraph Orchestration runs plans and applies from your pull requests.
2. Infrastructure as a Database replaces the state file with a dependency graph stored in PostgreSQL, so Stategraph operates only on the subgraph a change actually reaches.

Infrastructure as a Database adds a few things to that workflow, including:

• Plans that only read the resources your change touches instead of the whole state file.
• Resource-level locking that lets applies run concurrently when changes don't overlap instead of queuing behind one global lock.
• Cross-state transactions that commit as a single atomic unit instead of applying state by state and hoping nothing breaks in between.

None of that requires you to rewrite your configuration. Stategraph works with the same HCL, the same modules, and the same providers you already use, and importing an existing Terraform state is a terraform state pull followed by one stategraph import tf command (you can export back to a plain state file any time, so adopting it isn't a one-way door, and it doesn't lock you in).

Orchestration is also open source under MPL-2.0, so the workflow layer isn't a black box you're trusting blind.

The pricing structure is the main departure from HCP Terraform's RUM model. Stategraph's Free plan on Stategraph Cloud is $0 forever and isn't metered by how many resources you manage at all; it covers three users and fifty runs a month, capped at one concurrent worker, with the full Orchestration feature set, including SSO, RBAC, CODEOWNERS, policy enforcement through OPA, Conftest, or Checkov, drift detection, and cost estimation, included from the start rather than gated behind a higher tier.

If you'd rather run it yourself, the self-hosted open-source edition is free for up to three active users a month per GitHub or GitLab installation, with unlimited runs and concurrent workers, although RBAC, CODEOWNERS enforcement, approval gates, and centralized configuration need Orchestration Pro when you self-host.

Once your team grows past a handful of engineers, Orchestration Pro is a flat $12,000 a year with no per-seat or per-run charges, unlimited users, and unlimited concurrency, on Stategraph Cloud or self-hosted at the same price.

Infrastructure as a Database, the part of Stategraph that replaces the state file with a queryable, Postgres-backed graph, starts at $25,000 a year as a separate tier, single-tenant with its own isolated Postgres on Stategraph Cloud or self-hosted in your own infrastructure, with dedicated support and a custom SLA.

Cost is set by your plan tier rather than by every security group rule and IAM policy your modules create, which is easier for teams to forecast and explain internally than a bill that moves with resource count.

Orchestration itself runs through your own GitHub Actions or GitLab CI runners rather than a vendor-hosted execution fleet, with Terraform, OpenTofu, Terragrunt, Pulumi, CDKTF, or any command-line tool you already use.

Drift detection is also included: Stategraph can run scheduled plans against your directories and open an issue when it finds drift, as part of the Free plan rather than a feature you have to buy your way into.

Conclusion

Is Terraform free? The Terraform CLI still is, licensing nuances aside, and HCP Terraform still has a free tier too. However, the legacy, user-based Free plan ended on March 31, 2026, and the enhanced Free tier that replaced it bases its limits on managed resources instead of headcount, a better deal for small teams and a real new ceiling for anyone managing infrastructure at scale.

If a bill that grows with every managed resource makes budgeting hard, try Stategraph free and see what flat-rate Terraform orchestration looks like as an alternative to RUM pricing.