The ACT government has been urged to explore a "renewable tenure" system, where future grave sites are sold for a period of less than 25 years.

In its submission to an ACT parliamentary inquiry into the maintenance of graveyards, the ACT Public Cemeteries Authority said a renewable tenure system was the most "financially sustainable and responsible model" of running cemeteries.

Unlike most other Australian jurisdictions, when you buy a burial plot in the ACT it is yours forever and must be maintained in perpetuity.

The price of your burial plot is supposed to cover its future maintenance but with more and more people choosing to be cremated, there is a widening gap between what it costs to maintain cemeteries and the money coming in.

This onerous task is understood to be one of the reasons a new cemetery at Hume, the Southern Memorial Park, has been left on the backburner.

However with a shortage of land, and with space running out in the Woden cemetery next year, the authority said the government should consider limiting "perpetuity" to 99 years or selling burial plots with 25-year tenures.

Families would have the option of renewing the burial plot at that point. In NSW they have two years to renew the lease.

If the lease is allowed to expire, the grave can be reused.

Limiting the tenure would bring down the cost of burials and help the authority maintain cemeteries going into the future.

The authority inherited a significant unfunded liability for burials that took place before 2003, which has since blown out to $18.1 million.

The cost of upkeep in the ACT's three cemeteries is also growing while fewer people are being buried.

Renewable tenure could help address this shortfall over time, the authority said.

"The authority sees the need to reduce the period of reservation of exclusive right to allotment to a term of not more than 25 years, incorporating provision for a renewal option to be available," the submission said.

The authority acknowledged the proposal could be controversial, and said it would not support the introduction of such a model on a "retrospective basis".

While this has been done in other cemeteries around the world, the ACT does not have the same pressing space constraints.

The authority said there were some faiths that strongly supported perpetual tenure and the government would need to carry out a "significant" public engagement program to assure people their loved one's remains would not be disturbed.

"Families would not be obliged to relinquish tenure. If they chose to renew at each opportunity there would be in effect no tenure change. However, most families would benefit from lower costs associated with a shorter tenure as provisioning for forever is costly," their submission said.

Authority chair Stephen Bartos told the inquiry forever was a "very long time and provisioning for forever is extraordinarily difficult".

"It is one of those policy areas where, in terms of how we might implement it, there are potentially only winners and no losers in the sense that the proposition that the authority board would prefer to pursue would give people who wanted perpetual tenure and had the capacity to pay for it that option, whereas if people were to elect for a shorter period of tenure - renewable - then the costs for the person choosing that option would be lower," Mr Bartos said.