It’s an unusual set-up. You can see the dining are and kitchen from the living room but it’s not an open space at all. You are completely walled off from the fridge wall down because of the stairs and possibly a hallway.

We need you to give us as accurate a layout as you can with measurements of the space. If you are new here check out the New to Kitchens thread for details. With little else to go on I’d say the first thing to consider is running hardwood floors through the entire space.

I think the layout you ultimately end up with may involve removing the fridge wall cabinetry altogether and popping in an island if the numbers work.

when you say remodel, are you thinking remove everything?

Salvage any cabinetry and appliances? I'd remove the bar counter, that is what makes it feel cramped. you have a lot of storage. The refirgerator sticking out into the space, right in the middle adds to the cramped feel. I'd put it on the end rather than in the middle.

Even a counter depth fridge will stick out on that wall. The cabinetry appears to be 12” deep. And you appear to have a dining room on the other side of that fridge wall. Again, it’s an unusual set up. Your best bet is to post a full layout with measurements.

Your kitchen is not small by my standards and the layout is nice. But, I can see why it feels cramped to you: the fridge size and the bar "peninsula".

Do you feel you need to have counter stools in here or can this table area be enough seating connection to the kitchen? I'd remove that stool section so it isn't a G shape. Having a longer counter run will make it feel more open here.

Not sure how to handle the fridge depth unless you do a remodel and get it on a wall with base cabinets and use a counter depth.

Oops, I didn't notice the shallow cabinets on the fridge side. Kendrah's idea is a good one.

I think its a decent size kitchen. Doesnt look like it would be cramped working in there. I also like the layout, except for that table thing on the peninsula. I agree, that the frig sticks out a bit far, and doesnt look good, but, I do like where the frig is, its in a convenient location when you are making food. I dont mind the floor and countertops either. You could use some color in there in form of accessories. It looks a little bit on the bland side. A rug in front of the sink area, in some brighter color, and a bit of color on the counters, and walls, if you have any that you could put some on. The pictures are not clear on that.

I would be doing some research and exploratory holes in the soffits. If they can be removed, even if only from the kitchen area, and allow full height cabinets, it would make the kitchen look less squat without that vertical band across the space.