Abstract: Adjustment into the New Normal of China's macroeconomic and the real estate market in a depressed state, the land finance of local government is in urgent restructuring. This paper estimates the size of land finance of local government and explore the institutional environment from the dimension of land finance with tax reform, land supply system, government performance evaluation mechanism; then test both inside and outside incentives of land finance from "financial pressure" to "performance evaluation" of local government by using 2003--2012 China's provincial-level panel data. We find that the incentive of land fiscal of local government behavior "performance evaluation" is much larger than that of "financial pressure". On this basis, the paper proposes the optimization and transition of land finance of local governments.