Once the Princess finishes Vald's Key quest, Jacia will offer the Princess the quest of killing Vald in his house at 15, Squire's Road in Betancuria West. Jacia will ask the Princess to bring Vald's head as a proof. This is a straightforward task, albeit a gruesome one. The Princess can refuse to take this quest and earn some alignment points towards good, or take it and gain some points towards evil.
Spoiler: Once the Princess returns with Vald's head, Jacia will reveal that she had a relationship with Vald and wished to have him dead out of personal spite.
Talk to Jacia in the hideout (sewers) after you have finished the Vald's Key quest and she will tell you that Vald is an old friend of hers she wants to see dead. She will give back to you the key you just stole from Vald.
Go to 15, Squire's Road (Betancuria West) and unlock the door using Vald's key. If you come at night, Vald will be asleep and can be killed by "coup de grace". Kill Vald and take his head.