johneym,
You need to read the Statutory Development Plan that is in place for the area that the site is situated. Some Development Plans require a minimum of 0.5 acres/0.2 hectares for new rural dwellings, some Plans require this minimum for existing dwellings, including old cottages. Your answer lies within the Plan!
In relation to the Septic Tank system, given it age predating Copes of Practice for such systmes, if it's operating properly the size of the site won't really matter. However, if you plan on extending the property and the PE increases, you may need to update the system and then you'll need to comply with EPA Code of Practice, 2009 in relation to size, separation distance etc. At 1/3 acre it's anyone's guess as to whether you could comply with EPA CoP 2009. I've seen smaller sites than this comply, but it depends on ground conditions, gradient, other wells etc in the vicinity.