This is a big deal. Get it wrong on anything and you will have issues with condensation ruining your equipment, or even carbon monoxide poisoning.

This requires a permit and inspection in most municipalities. Please consult your local codes, and gas venting code book.

If this is beyond your true expertise, I suggest you reach out to a qualified and licensed professional.

I know this is a big deal. I do have years of construction experience. I have my permits. I am more then capable of doing the work, as long as someone will give me a bit of knowledge. I am going to use double walled insulated stainless, and as you might know this is not cheap. That's why I want to know if I can use 6 inch instead of 8 inch. Don't want to pay more if its not needed, but if it is, then I'm happy to. As far as hiring a professional, I was going to do that for the HVAC. The cheapest bid was about 6500 bucks for my 1100 sq ft home. Not happening. I'll just have a talk with the inspector when he comes by.

Your best bet is to ask the building code official. They are the ones who will sign off at the time of the final inspection.

Sizing chimneys is easy if you can understand charts
Many factors are involved such as type of appliance, height, BTU's ect.
Plenty of online resources available
Here's one

Here is a link that might be useful: Sizing

I meant no offense. Glad to know that you are aware of the importance of this. I agree with Mike to check with your codes official for guidance. Consider asking them who teaches this in your local area at the community colleges/trade schools. Usually instructors are eager to share their knowledge and help make sure that bad installs don't occur, and might be open to looking over your plans for any areas of concern.

Do not use 8" under any circumstances. NFPA 54 regulates the venting capacities for your Category I appliances. The tables, as pointed out are very specific as to length of vent connector, height of chimney and btu capacity of the system. You may actually be able to run 5" all the way. Is this LP or NG? What is the make of the furnace? That manuf should be able to provide you with information on vent recommendations. You will need the model numbers of the appliances, btu capacity of each. Distance from the appliance breach to the vertical chimney and the total height of the flue. Termination should be 3'above anything within 10'. You should use b-vent for your vent connector. It will really help the operation of the system. Look at Dura-vent or Selkirks site for information on their products. They are the two top manuf of B-vent.

Was thinking about this a bit further and not having the tables thought I'd post this. The cross sectional area of 3, 5, 6 & 8" are 7, 20, 28 and 50 respectively. Basic physics says that when a gas expands it cools. Oversizing your new flue will kill the draft, especially when only the water heater is operating. I think you are looking at 6", but depending upon how tall the stack is, you may be able to get away with 5". The table tell all!

Or just stop guessing and click on the link I provided above