Excessive reliance on land transfer revenue by local governments is a main problem that China's public administration are confronted with. Reforming the tax system of real estate and triggering the chain reaction of land system is the basic way to solve the predicament of land governance in China. By predicting the change of related land fiscal revenue in typical cities under different reform schemes, the paper evaluates the prospect that the real estate tax will replace the land selling (pure) income as a local pillar source of income. The study finds that if reasonable design covers the real estate tax of city stock and newly increased housing, it's feasible to ensure local fiscal revenue of land steady in the short time and replace land transfer income by real estate tax as the local financial pillar in the long time, which means sustainability of revenue is strengthened with support among local governments. In the near future, the government should change the situation in which circulation is valued and tenure is ignored, and optimize real estate tax as the main part of local tax. In the long run, series of reforms, which includes urban-rural integrated land market system, land transfer system and increment tax on land value, should be promoted to make the source of the local land revenue deriving from sustainable estate retention tax and increment tax on land value other than one-time net income of land sales, thus land governance of local government will regress to standard, and the predicament of land finance and land governance will be resolved.