matching up 1/2" hardwood floor to 1" tall tile
Shimming with tar paper is only for small dips in the floor. You would have to lay out the plywood as you had thought. Transition strips, both factory made and fabricated on site deal with this kind of an issue. You should allow a gap between the tile and the wood floor to allow the wood floor movement. A transition strip will help deal with this as well.
Josh Jaros Remodeling in The Woodlands, Texas
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