I think it would depend on the timing. If it could be viewed as part of a "single transaction" (i.e. a single building project) I could see it being regarded as a 2 storey extension.
If it is done after the first part is complete with a clear break, then it is merely an internal alteration.
If the 1st floor extension is done after the envelope of the ground floor extension is completed, it *may* then become an internal alteration subject to Section 4 (1) (h) of the Planning and Development Act 2000.
One limiting factor would be the sightlines towards other properties - a window to 1st floor extension has to maintain 11.0M to a boundary IIRC - so careful consideration of windows, light and amenity would play a factor in its exempted status.
The other factor is the area limits imposed on the different types of houses for 1st floor exemption (Total 40sq.m. with up to 20sq.m. of that at 1st if its detached and 12sq.m. if its terraced or semi-D).
As has been noted, its a very gray area, but given the situation many are in, unable to sell or trade up but looking for a way of increasing area, raising it here might be bear fruit for others.
I wouldn't advise that anyone should be cocky about it - personally I'd discuss it fully with the Planning Officer before I carried out the works.
The last thing you would want is a planner who might be brought around with logical argument taking precipitous action.
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 matter at hand.
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