In the process of urbanization,the formation of land finance is caused by many factors,such as the local fiscal deficit,the assessment criteria of local officials’ performance and the disadvantages of land revenue distribution,etc.Land finance is in a dilemma:the property prices will soar and the financial risks will aggregate if the land finance keeps going; while the revocation of land finance will impose a heavy risk on the industry chain and aggravate the urban-rural binary structure.The results show that only by means of strengthening the macro management of central finance,separating the management functions of local government,improving the local tax system and the performance assessment system of local officials,and constructing the land income distribution system considering the interests of state,collective and individuals can the dilemma of land finance be resolved in the process of urbanization.