How to declare variable in postgre SQL?

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PostgreSQL

I want to create some variable in function how i do that?

What I have tried:

Declare dat date;
--,start_date date,end_date date;
dat:='2016/07/03';
select extract(year from dat);


this is my error

ERROR: syntax error at or near "date"
LINE 1: Declare dat date;
^

please help me that