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Sprite sort order: Paper 2D character and Tileset.

I’m trying to create an isometric scene using a tileset and a paper character. The desired behaviour is to have a character appear in front of a tile if the character is below the tile, but appear behind the tile if the character is above the tile.
DesiredResult.png
I have the tileset configured with 2 layers. The bottom layer is for collision and the top layer is the wall where I would like to implement the desired behaviour.

Here is the result of my setup:

Does anyone have any suggestions to achieve the desired behaviour? Thank you in advance.