Hopeful,
In order.
The same Exempted Development Schedule regulations apply - the 40 sq.m. limit relates to the nett additional living space over and above the originally permitted area of the house that can be added to it without seeking permission, but there are several restrictive regulations governing it.
The 40 sq.m. allowance includes the total area of any previous extensions / conversions of garages with or without permission. In other words, if you have an existing 20sq.m. extension you can only add another 20.sq.m. to the house, assuming all other requirements are met for exempted development. You need to audit the house to see what other developmetns were done to it to arrive at the allowed figure.
Neighbours can always object. Anyone in the whole country can object to any development, permitted or otherwise. If it is exempted, it only takes a letter to planning enforcement during the construction of the house. Whether they have standing under the law to press their objection is neither here nor there. A client of mine who had had what he thought was good advice was made seek retention application because his advisors hadn't understood the subtlety of planning regulations governing the height of eaves. His neighbours took a Section 160 Action against him.
Normally I would have said "no" in relation to sunlight issues, but we've recently had a query in relation to overlooking caused by a ground floor extension on AAM. On steeply sloping land, there is the possibility that a ground floor extension could cause significant overshadowing. With regard to a ground floor extension to an existing two storey house, it is possible that the height may be limited only by the existing eaves and ridge height if it is a double height ground floor space. Such a space may be a very good solar collector. Food for thought perhaps.
I think you now have an opportunity, forced on you by necessity perhaps, to create an unique property well suited to your needs. My recommendation is that you should use a competent architect to investigate your families needs and design accordingly. This should include an assessment of your immediate family needs, your needs as your family grows up, your needs as empty nesters later in life, and the running costs of your house in what may well be an increasingly difficult economic environment for the next few years.
You design should not just relate to room sizes or "big kitchens" but to usable spaces that increase the visual and aural amenity of the house while leaving you options to diversify and grow as individuals. In many ways the provate house is both the source of all architecture [the "domus"] and the hardest commission to get right. It supports the institution of long term relationships, which change over time, and the needs of a growing family, which define the nature of change in many people's lives. Time well spent in designing the extension now will be dividends over the life of the property and proper professional certification of both design and works will help ensure that awkward requisitions on title will be minimized.
Can I also suggest you do not tie yourself in knots by limiting yourself to the exempted development schedule. It takes two or three days to do the bare survey work, draw, check, compile and lodge an application for permission. The bulk of the design work si actually done before the lodgement and will only be a fraction of the cost of the time spent on design. Therefore, consider well the option of elimating the restriction of convenience and achieving the house you really need, as opposed to limiting yourself to an arbitrary and artificial area restriction.
Yes, you can get objections to an application, but don't worry. These things can happen. If you have done your groundwork with your neighbours, these will be minimised and may be avoided altogether. If you still get objectors, they must submit their Observation within five weeks from the date of lodgement of the application. The local authority can then decice to condition changes or seek further information. Thus matters can be resolved withotu ever getting to appeal stage, but again, if they do, this can be adderssed. Your only problem with planning is not to over commit to a timetable. Nothing is certain, but both the local authority and An Bórd Pleanála must be seen to act in a reasonable and competent manner.
Either ways, its all part of your grand adventure. Because make no mistake, whether you go down teh route of permitted or exempted development, this is an undertaking that will stretch you and make you grow in ways you hadn't considered. The best of luck luck with it and you might let us know how you get on.
HTH
ONQ.
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All advice on AAM is remote from the situation and cannot be relied upon as a defence or support - in and of itself - should legal action be taken.
Competent legal and building professionals should be asked to advise in Real Life with rights to inspect and issue reports on the matters at hand