D is correct: "We had the kitchen redecorated." The structure "had something done" is used when someone else did something to you in the past. In this case, it was a designer who redecorated the kitchen, not the subject of the sentence (we). It is the same reason why you say "I had my hair cut" when you go to a barber, and not "I cut my hair". The latter implies you cut it yourself.

D Your grammar book probably calls this “causative have.” If you have the well-known English Grammar in Use by Raymond Murphy, consult Unit 46.