Gerringong and District Historical Society publicity officer Margaret Sharpe said grave sites had been particularly useful in the past to help people in their quests to trace their family trees.

While the new legislation will only affect new burial plots, not plots already purchased, Mrs Sharpe said new plots would still have a role.

"They're not inclined to put as much on the headstones these days ... but it gives them a sense of place as to the area they lived in and it makes that link with that person," she said.

"It's important to people to find those things."

She questioned what would happen to the old headstones in the event people were disinterred after 25 years.

"That should be something they should be looking at," she said.

Under the new legislation, leases could be renewed for up to 99 years - if the lease is not renewed two years after its expiry, remains could be buried deeper within the plot or moved to an ossuary house.

The bill was introduced to combat declining burial plots in Sydney, however Kiama Family History Centre volunteer Ray Thorburn, who has delivered several talks on cemeteries, said cemeteries were heritage and the solution to the problem was to create new plots.

"When you've got the land that Australia has and the fact that we now have the transport to get there, I can't see how every person who goes to their maker shouldn't have their own plot and not be tipped in the same hole as another person or a couple of people like in Rome, or Italy in general," he said.

Mr Thorburn pointed to the grave of John O'Neill Goulding, who is buried in the Gerringong Cemetery - Goulding sailed to Australia on the last convict ship from England in 1868.

"It's a wonderful headstone, surrounded by a wreath of shamrocks, so you immediately know he's Irish, it refers to County Kerry so we know exactly where he came from and it says 'God save Ireland', which was the catchcry of the Fenians, so you know his politics and his social interest," he said.

"Then you look him up and find the rest - it's an index."

Mr Thorburn believed a 25-year rotation of burial plots would cause confusion, saying Australia risked a repeat of London during the mid-1800s, where high rates of infant mortality led to mass graves. At the time, older bodies were disturbed to make way for newer ones.

"They didn't know where they were buried," Mr Thorburn said.

"The implications are that there is going to be a loss of identity in a lot of cases and there's no need for it.

"It's bad enough now to find correctly labelled areas and correctly labelled burial sites."

Some limited tenure cemeteries already exist - Kiama Municipal Council owns the Kiama, Gerringong, Jamberoo and the closed Kendalls cemeteries, however no renewable tenure options are currently listed on their application forms.

Member for Kiama Gareth Ward was not in attendance when the bill was passed in the lower house.

Mr Ward said, while he had been granted leave from the vote, he did not support renewable tenure.

Twenty-seven government MPs were absent, including Premier Barry O'Farrell.