Replace roof, raise wall height vs extend

We have an old 1960's 2 story red brick house on a large 1500 sqm block and are looking at options to renovate. Ceiling heights are a major issue as we want to flip living area to downstairs (currently a low celiing garage/rumpus), and replace garage doors with glass panels/sliders to open to outdoor living area....

We also want to replace old brick/tile roof to a more modern/flat roofline or camoflage it somehow.


Option One - is to create a void in the top floor of the house and relocate bedrooms to a new "wing" extending the footprint of the house. Keep existing roof and update eves.

Option Two - is to gut the entire top floor of house, remove roof and extend walls up 2 metres and then reinstall flooring with a 3 mtr roof height downstairs living, 2.7 mtr upstairs bedroom.

Hope this makes sense.

Am I crazy? I am wondering if anyone has considered anything similar and if there is a significant cost differential?
Thanks so much in advance.

It will be cheaper to knock it down and start again.
You will also end up with a better product that is designed from the start to fit exactly what you want rather than trying to "make"something work.

ok thanks - yes was wondering if that should have been listed as Option Three!