Thanks all for your advice. Ive included some renders that I made with view along the corridor with and without the bulkhead. I don't think renderst does it justice until you actual walk through @ frame stage. I agree that ceiling height and comfort and look, depends on climate, orientation, insulation, relative proportions of other parts such as windows/doors. Because of the Melbourne climate, we have planned for double glazing, and good insulation with R2.5 batts wall, R6.0 ceiling. We have 2.4m height of windows and door around the ground floor which is btw 3 to 3.6m so I think proportion wise should be ok. In the family where it was always planned 3.6m from the start, we have a band of clerestory windows too. We have decided not to be too excessive with windows ( ie 3m and even 3.6m floor to ceiling - how grand would have that looked though! ) to minimise heat loss during winter. Energy rating for house is 7 stars so far. Thanks for giving me the pro and cons - I have some more confidence to let it stay at 3.6m throughout now.

You can have what ever ceiling height you can afford. But also think of what height windows, internal and external doors will be. What heating and cooling system you will install. What window treatments will be required for extra height windows, etc etc. Our double storey home has 2700mm ceilings throughout with 2400 doors and windows. This height is ideal. A gable ceiling in the living and dining areas, I think, has more character than a 5 metre ceiling in one room. Have 2700 ceilings throughout the remainder of home. Depends on the aesthetic you are going for, to what the design could be.

thanks all- we in south australia. most homes we have lived in are character homes that have original high ceilings so having the 2400mm ceilings feels more enclosed to us personally. I've researched and hoping we can expose floor joists and line them with gyprock to 'raise' the ceiling height to the lower floor. upstairs we can vault the ceilings and add skylights to open it up

Renovating or restoring as many Victorian features as possible .....Should the 3300 section of your hallway have the original cornice, retain/restore, Many Victorian terraces have a bulkhead along the hall with arch and corbels.