You have to complete Project K in order to unlock terraforming in ACNHBring on the music.
As you get further along in Animal Crossing: New Horizons, you'll eventually be asked to work on Project K. Basically, you'll be asked to pretty up the island in order to accomodate a K.K. Slider concert. There are several steps needed in order to get this far in the game and even more steps to completing Project K. Here's a guide for completing Project K and bringing K.K. Slider to your island.
How to complete Project K, bring K.K. Slider to your island, and unlock terraforming
Upgrade Resident Services to a building
Talk with Tom Nook
Build the campsite
Invite new villagers to live on your island
Build new houses
Make improvements to your island
Get feedback from K.S.
Wait for K.K. Slider to appear
Purchase terraforming permits at the Resident Services kiosk
1. Upgrade Resident Services to a building
In order to get this far in the game, you must have upgraded Resident Services from a tent to a building. If you haven't done that yet, here's a guide.
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You have to complete Project K in order to unlock terraforming in ACNH
