House has many good features, I love how the bedrooms are divided from the living area, that can be very important if you have young children. I even like how the door to the laundry is screened from the dining area - little things like that are important to me. The toilet in the bathroom would annoy me, but having the second toilet in the laundry would offset that. I think I would be inclined to close off the lounge room as a TV/Media room that would free up the general living area for just living. The outdoor areas look well planned with excellent access from the house. Oklouise's idea of relocating the kitchen looks an excellent idea but plumbing could be an issue here, firstly it would be expensive just to move the plumbing and something to be generally avoided with renovations, and secondly with rooms underneath the house, it may not be possible. As the kitchen is now, opening it more to the living room could be a good idea except I can see possible safety issues with the hotplates being exposed to passing traffic - especially with young children in the house. I agree with David - you do have to think about how you are going to live in the house and the lifestyle you envisage. For this reason, if you do decide to purchase, I would strongly suggest you live in the house for a year before doing a thing. That way the things that aren't working for you will become very obvious as well as things you need or would make life easier making decision making simpler. You will also get a feel for the lighting in the house, where it can be improved and the aspect of the house - what rooms may need warming (south facing rooms) or what rooms need cooling (west facing rooms).

before i draw your latest sketch here's another version "already prepared earlier" that might be worth considering (btw i strongly advise that you consult local council before we assume that re-building on the boundary is legal as building on the boundary creates major problem for any roof and proper drainage)... you will notice i've added extra separation between the kitchen and toilets and there's space for a tall narrow window into the courtyard from the bathroom (although any window in the pantry would be best as a narrow splash back with external shutters for a view to the courtyard without hot western sun) and your kitchen servery window photo is idealand this is the closest photo i could find for the north window and here is a suggestion for the new roof that would echo the roof of the main house and include the north facing clerestory window and raked ceiling..the 3d "view" is a very rough approximation of the north facing window over the kitchen but angles of the new roof, ceiling height and number of steps down to the extension will be subject to careful on site measurement

yazrav wanted the ens next to the central courtyard with outdoor shower for access to the hot tub for communal use, swopping the kitchen and pantry was to create more space for the bigger island for family crowds, add some privacy to the courtyard and reduce the south western glass...the dining table in my plan is 3m long and the extra small room off the master suite makes an ideal nursery with space for biw, large cot, nursing chair and change table and in the big study i've added a wall to wall 75m deep desk and overhead wall to wall shelves with space under the desk for drawers, storing bean bags and there's office chairs and full height wall to wall bookshelves at the other end

I'd say it's an easy min. $250K minimum flagfall on a relatively basic/not fancy spec/fit-out in a super good package deal. You're essentially renovating an entire house including moving plumbing, walls replastering, new floors throughout etc....not to mention lights, rewiring etc etc, it goes on and on.......This scope would still cost a builder themselves $150K, not factoring in their own time/labour, paying cash for sub-trades and getting super deals on all materials....and then you could only really potentially roll this type of operation out if you actually have the money in the bank. If you need to borrow then you'd need a building contract which then brings in market rates, profit margins and GST. Take profit and GST out from $150K and there's barely enough left to cover materials alone, when the labour/materials ratio (of a construction cost) these days, particular for renovations is labour being the most significant cost involved.............you can fine tune and perfect a floor plan like you have (which I reckon is pretty good as a plan), but when push comes to shove it always comes back to budget and costs, which is why we always are encouraging people to utilise design professionals who manage the challenge of designing within budget limits. If you separate budget/costs from the design process (rather than integrate it) more often than not it will leads to disappointment and misalignment of your expectations of what is realistic.