Land expropriation policy is related to social stability and sustainable development, and its implementation will have an impact on the relative poverty of residents. Based on the data of the China Family Panel Studies (CFPS) from 2010 to 2022, this paper constructs a staggered difference-in-differences (DID) model to evaluate the impact of land expropriation policy on family relative poverty. It is found that the land expropriation policy can significantly alleviate the relative poverty of families, and PSM-DID and placebo tests also show that the above conclusions are still valid. Further analysis shows that the poverty reduction effect of land expropriation policy exists in gender, family dependency ratio, land value, and urban–rural heterogeneity. The mechanism analysis shows that the land expropriation policy can reduce poverty mainly by increasing the proportion of non-agricultural income, promoting labor migration, and improving social and economic status. The conclusion of this paper provides relevant theoretical support and policy enlightenment for implementing land expropriation policy and fully realizing the goal of rural revitalization.