could be a very big job but there must be some under the floor reason for doing it because it would have been an extra hassle to do it on purpose ....if you're thinking of buying the house you should be able to arrange for a building inspection to specifically identify what's under the raised floor ...shouldn't be any real problem changing tiles etc but the level is a much bigger issue...might be something to do with the way the roof of the extension has been attached, slope of the block or a previous owners idea of an attractive feature??

could be that the original floors are too low?? but if the underfloor frame and stumps of the extension are in good condition and the step is a natural step height ( ie not so small or big that it's a trip hazard and 170 mm should be OK) and the ceiling is at least 2400mm high i would be inclined to spend money elsewhere....lowering the floor would mean putting in a "patch" in the wall cladding all round and could potentially impact electrical wiring and asbestos lining and be a horrible messy, expensive job with very little reward..what are your long term plans for the house?...would be interested to see a floor and site plan to see if there's any way to rearrange rooms so the change in floor levels is not so obvious....looks like a house in north Queensland and is that a high front or side fence?

i can't see the measurements properly but consider swopping the kitchen to the bathroom side with a window from kitchen to family and you'll find that the height of the bench on the family room side will be a good height for chairs or short stools and there's more wall space for the kitchen, plumbing on the same side and space for a window in the dining room out to a narrow side courtyard??...what are the dimensions of the kitchen and family rooms and i'll make a more accurate plan...btw describe the climate and where is north??...